The Indian rupee recovered from a low of 100 per US dollar in the forward market, trading at 96.43 on Thursday. This improvement follows US President Donald Trump’s announcement that negotiations with Iran are progressing towards a conclusion.
On Wednesday, the one-year forward market rate for the rupee had reached the significant 100/USD mark, reflecting currency market sentiments that are anticipating a weakening trend for the USD/INR exchange rate over the next year, according to forex traders. Investors are closely monitoring geopolitical risks and oil price fluctuations, as any escalation in tensions in West Asia or spikes in crude oil prices could impact currency stability.
In the interbank foreign exchange market, the rupee opened at 96.25 against the dollar, achieving an early peak of 96.05 and dipping to a low of 96.60 during intraday trading Thursday. The previous day saw the spot market for the rupee hitting a new low of 96.95, eventually closing at 96.86, marking another record low.
After an initial uptick prompted by hopes of a trade deal, the rupee was unable to maintain those gains, noted Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.
A report from US media indicated a strained phone conversation between Trump and Israeli Prime Minister Benjamin Netanyahu regarding strategies in the Iran conflict. The conversation suggested a preference from Washington for a diplomatic resolution rather than military action. Following their Tuesday call, Netanyahu reportedly expressed frustration, as he advocated for renewed airstrikes to further diminish Iran’s military capabilities.
Trump had previously postponed planned strikes on Iran due to appeals from Arab nations, including Qatar and the UAE.
According to Amit Pabari, Managing Director of CR Forex Advisors, the rupee has depreciated over 6 percent since the escalation of the Iran conflict, exacerbated by rising crude oil prices. On Wednesday, the USD/INR rate approached 97, reaching new all-time lows near 96.96.
A research note from IFA Global suggested that the USD/INR pair is expected to trade within a range of 96.60 to 97.10, maintaining a weakening bias. The analysis indicates that forward rates have been impacted across various durations, with 3-month, 1-year, and 3-year implied forward yields at 3.73 percent, 3.48 percent, and 3.44 percent, respectively.
Additionally, the dollar index, which assesses the US dollar against a basket of six currencies, was reported at 99.30, rising 0.22 percent. In crude oil markets, Brent crude, the international benchmark, was trading at $106.02 per barrel, up 0.95 percent in futures trading.
In domestic equity markets, the Sensex dropped by 207.04 points to close at 75,111.35, while the Nifty fell by 20.55 points to reach 23,638.15. According to exchange data, Foreign Institutional Investors sold equities totaling ₹1,597.35 crore on a net basis on Wednesday.
Published on May 21, 2026.
