The Indian rupee reached a new low of 96.91 against the US dollar in early trading on Wednesday, marking its seventh consecutive session of losses. This decline has been driven by surging US Treasury yields, high crude oil prices, and ongoing tensions between the US and Iran.
Opening at 96.86, the rupee fell by 33 paise from the previous closing value of 96.53, which was already a record low. This week, the currency has depreciated by 0.6%, following a 1.6% decline the week before, bringing its total drop to over 7% year-to-date, making it the worst-performing currency in emerging Asia.
The immediate catalyst for this latest drop was a significant rise in US bond yields. The benchmark 10-year Treasury yield surpassed 4.5%, increasing by more than 20 basis points over the past four sessions, while the 30-year yield rose above 5.1%, the highest level since 2007. The CME FedWatch tool has indicated a 47% likelihood of a US rate hike by December, a sharp increase from the 14% reported last week.
Brent crude oil prices have remained around $111 per barrel, amid limited progress in US-Iran negotiations, as noted by US Vice President JD Vance. As India imports a considerable portion of its crude oil, heightened dollar demand from oil marketing companies is exacerbating the current account deficit given the rising prices.
Since the onset of the Iran conflict in late February, foreign investors have withdrawn over $22 billion from Indian stocks and bonds, further straining the country’s balance of payments.
Ponmudi R, CEO of Enrich Money, stated that the rupee is currently trading within the range of 96.80 to 96.90, with immediate resistance noted near 97 to 97.20. He warned that a sustained breakout above this level could push the rupee towards 97.50, with 98 becoming a potential target in the near term. He emphasized that the Reserve Bank of India’s intervention could play a crucial role in moderating short-term volatility.
Published on May 20, 2026
