Rupee Hits Record Low of 95.85/USD As Energy Risk Worries Deepen

The rupee weakened further against the US dollar in early trade on Thursday, slipping to a fresh record low of 95.86. Persistent worries over the West Asia crisis and higher global crude prices continued to pressure the currency, extending the slide seen during the previous session.

With Thursday’s move, the rupee has now lost more than 6 per cent against the US dollar since the West Asia conflict started. This decline has made the rupee Asia's worst-performing currency so far in 2026, highlighting how strongly global risk factors are hitting India.

Rupee under pressure from crude prices and West Asia crisis

Traders said India’s latest policy move, raising import duties on gold and silver to 15 per cent from 6 per cent, is aimed at easing pressure on foreign exchange reserves. However, dealers believe the rupee’s direction will depend more on crude prices and developments in West Asia than on gold flows.

At the interbank foreign exchange market, the rupee opened at 95.74 against the US dollar. It then slipped further to 95.86, marking a fall of 20 paise from the previous close of 95.66. On Wednesday, the rupee had already touched an all-time intraday low of 95.80 against the US currency.

Market participants noted that other global indicators remained mixed. The dollar index, which tracks the US dollar against six major currencies, was trading at 98.48, down 0.04 per cent. Brent crude futures added 0.44 per cent to trade at USD 106.10 per barrel, keeping import cost worries alive for India.

"From jewellery showrooms to fuel stations, every imported commodity is now carrying a heavier price tag - and the rupee is feeling the weight of it," CR Forex Advisors MD – Amit Pabari said. Adding to that, Pabari said geopolitical headlines are swinging market sentiment almost every few hours.

Rupee, equities and foreign investor flows

Domestic equities moved higher despite currency weakness. In early trade, the Sensex climbed 424.44 points to 75,033.42, while the Nifty advanced 141.90 points to 23,554.50. Exchange data showed Foreign Institutional Investors sold equities worth Rs 4,703.15 crore on Wednesday, signalling caution among overseas investors.

Rupee moves amid US-China talks and Iran war concerns

Global politics stayed central to the rupee story as well. Xi Jinping said on Thursday that 2026 will be a "historic, landmark year" for China-US relations while welcoming US President Donald Trump at the Great Hall of the People. The leaders planned several rounds of talks on Thursday and Friday.

The visit by President Trump is taking place against a backdrop of rising economic and geopolitical uncertainty, including conflicts in the West East and a global energy shock that has hit Asia hardest. Xi and Trump are expected to discuss the war in Iran, trade, technology and Taiwan, among other issues.

Uncertainty around Iran remained high. Pabari noted that market mood is changing frequently as headlines shift. "US President Donald Trump stated that he does not expect China's help in resolving the Iran conflict, while peace negotiations between Washington and Tehran remain on hold as both sides continue to disagree on key conditions," he added.