The Indian rupee weakened to a record low of 95.8 against the US dollar on Wednesday, slipping 6 paise from its previous close of 95.74, as persistent external pressures and firm global cues kept sentiment subdued.
Intraday Gains Short-Lived
The domestic currency gained during the session, appreciating to 95.51 levels after the government announced measures to curb the current account deficit (CAD) through higher duties on gold and silver imports. However, the gains proved short-lived amid continued demand for dollars from importers and overseas debt repayments.
Impact of Higher Duties
“Higher duties may also create incentives for illegal imports, as was observed earlier when the duty stood at 15% before being reduced to curb smuggling. In the short run, though, this measure can help reduce the import bill and ease pressure on the widening current account deficit. Since gold accounts for nearly 9–10% of India’s total import bill, the hike could provide some protection to foreign exchange reserves,” said Haresh V of Geojit Investments.
Worst Performing Currency in Asia
The rupee has depreciated over 6% in 2026, making it the worst-performing currency in Asia, and has fallen more than 5% since the onset of the West Asia conflict. “Markets are closely watching expected government measures aimed at curbing imports and supporting the rupee amid pressure from elevated crude prices and rising import bills. Despite intermittent recovery attempts, sentiment remains cautious as the rupee continues to trade under pressure near lifetime weak zones. Near-term rupee range is seen between 95.45–96.00,” said Jateen Trivedi, research analyst at LKP Securities.
Crude Prices and Macroeconomic Concerns
Elevated crude prices due to the West Asia conflict have strained the current account and led to downward revisions in growth forecasts, while inflation projections have moved higher, adding to concerns over macroeconomic stability.
Central Bank Intervention
Frequent central bank intervention and regulatory measures have helped contain sharper depreciation, though analysts have said that sustained recovery would depend on a sharp fall in oil prices and a revival in foreign capital inflows.
Future Outlook
The currency is expected to weaken further, with projections nearing 97 per US dollar by year-end. Major global currencies traded in narrow ranges with limited volatility, even as elevated oil prices and geopolitical tensions continued to pose challenges for central banks globally.
