The Indian rupee dropped to a record low of 96.61 against the US dollar on Tuesday, marking its sixth consecutive day of decline. This trend is attributed to high crude oil prices and ongoing demand for the dollar, which have adversely impacted the domestic currency. The USD-INR closed at 96.53 for the day.
Jateen Trivedi, Vice President and Research Analyst for Commodity and Currency at LKP Securities, linked the rupee’s decline to several external factors. “The rupee traded weaker by around 10 paise to 96.53, with elevated crude oil prices and sustained pressure on capital flows putting stress on the currency,” he explained. He noted that persistently high crude prices raise concerns about India’s import costs and the widening trade deficit, further weakening sentiment towards the rupee.
Trivedi also mentioned that market participants are increasingly opting for dollar purchases and rupee sales as a hedge against ongoing market volatility. He projected a near-term trading range of 96.25 to 97.00 for the rupee.
Despite intervention by the Reserve Bank of India and recent government initiatives, support has been limited, according to Ponmudi R, CEO of Enrich Money, a SEBI-registered wealth-tech firm. He pointed out that geopolitical uncertainties and persistent energy prices are driving the sustained demand for dollars, which raises concerns about India’s import costs and inflation outlook.
In the equity markets, the Nifty 50 index ended slightly lower at 23,618, down 0.1%. However, broader market indices outperformed, with the Midcap100 and Smallcap100 rising by 0.8% and 1%, respectively.
The IT sector gained from the weaker rupee, with the Nifty IT index increasing by 5.7% over the last two trading sessions. Additionally, the pharmaceutical sector, given its strong export exposure, is expected to remain in focus due to favorable currency dynamics.
Foreign Institutional Investors have emerged as net buyers, though analysts warn that the combination of rupee weakness and high crude prices could limit overall market momentum in the near term.
Published on May 19, 2026.
