Indian Rupee Opens At Record Low As Oil Prices Jump Above $111 Per Barrel

The rupee started trade on May 18 at 96.17 against the US dollar, slipping to a fresh record low versus the previous close of 95.97. The Indian currency came under pressure from rising crude oil prices, a stronger dollar and sustained foreign institutional investor outflows.

Market participants linked the weak opening in the rupee to a sharp overnight rise in Brent crude. Prices jumped more than 2 percent to about $111 per barrel after a nuclear plant in the United Arab Emirates was attacked, raising fresh concerns over supply security.

Rupee vs dollar under pressure from crude oil surge

Traders also pointed to renewed uncertainty around efforts to reach a peace deal between the United States and Iran. Those talks were seen as important for potential additional oil supplies. With negotiations now in jeopardy, expectations of tighter supply added further upward pressure on crude prices.

At the same time, the US dollar strengthened after strong economic data from the United States. The firmer greenback hurt demand for emerging market currencies, including the rupee, as investors moved funds towards dollar assets seen as relatively safer in the current environment.

Rupee vs dollar and FII outflow concerns

Persistent selling by foreign institutional investors added another drag on the Indian currency. Continued FII outflows reduced foreign exchange inflows into domestic markets, amplifying the impact of higher oil prices and the stronger dollar on the rupee’s value against the US currency.

Global risk sentiment also remained fragile after the meeting between US President Donald Trump and Chinese Premier Xi Jinping produced no notable breakthrough. With no clear progress on this front, currency traders reported cautious positioning, leaving the rupee vulnerable to external shocks and negative news.