Rupee Extends Losing Streak to 9th Session, Closes at Historic Low of 96.83 against US Dollar

Moneylife Digital Team 20 May 2026

Economy & Nation

The Indian rupee weakened for the ninth consecutive trading session on Wednesday, slipping 13 paise to close at a fresh lifetime low of 96.83 against the US dollar amid rising crude oil prices, persistent dollar demand and growing concerns over the impact of escalating tensions in West Asia. Separately, Reserve Bank of India (RBI) announced that after reviewing current and evolving liquidity conditions, it has decided to conduct a US dollar/Indian rupee buy/sell swap auction of US$5bn (billion) with a tenor of three years from next week.

At the interbank foreign exchange market, the rupee opened at 96.89 against the dollar and continued its downward slide during the session. The domestic currency touched an all-time intra-day low of 96.95 before recovering slightly to settle at 96.83, down 13 paise from its previous close of 96.70.

The latest decline follows a sharp 50-paise fall in the previous trading session, underlining sustained pressure on the domestic currency.

Forex traders attributed the rupee’s weakness primarily to elevated global crude oil prices amid geopolitical tensions involving the US and Iran which have intensified fears of supply disruptions and inflationary pressures.

India, which imports more than 85% of its crude oil requirement, remains highly vulnerable to global oil price movements. Rising crude prices increase the country’s import bill and fuel demand for US dollars, exerting direct pressure on the rupee.

The rupee’s depreciation reflects deep structural vulnerabilities linked to India’s dependence on imported energy.

Apart from crude oil prices, the strengthening of the US dollar in global markets and continued foreign institutional investor (FII) outflows also weighed heavily on the rupee.

According to traders, falling domestic equity markets further dampened investor sentiment and added pressure on the currency.

The rupee had briefly recovered earlier this year after intervention measures by the Reserve Bank of India. When the rupee traded in the 92-94 range in April, RBI reportedly tightened restrictions on banks’ short-dollar positions and asked lenders to reduce US dollar holdings in an effort to stabilise the currency.

Those measures temporarily helped the rupee strengthen towards the 90 level against the dollar. However, renewed global pressures and rising oil prices have reversed the gains sharply in May.

RBI may continue intervening intermittently to curb excessive volatility, though market forces and external risks remain dominant drivers.

The rupee’s continued weakness has sparked concerns over imported inflation, especially in sectors dependent on fuel and raw material imports. A sustained depreciation could also widen India’s trade deficit and increase pressure on the current account balance.

Economists have warned that if the rupee approaches the psychologically significant 100-per-dollar level, the impact could be severe for inflation management, import costs and corporate balance sheets.

The dollar’s strength globally has also intensified after investors shifted towards safe-haven assets amid uncertainty in global financial and commodity markets.

Market participants will now closely watch crude oil price trends, RBI intervention measures, capital flows and geopolitical developments in West Asia for further direction on the rupee.

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