Rupee Crashes To Record Low Of 96.60, Dollar Strength Tightens Grip

The Indian rupee slipped to a record intraday low of 96.60 against the US dollar on Tuesday before settling at 96.52 (provisional) , marking a fall of 32 paise from its previous close. The currency opened at 96.38 but extended losses through the day, following Monday’s record closing low of 96.20. The weakness was driven by surging crude oil prices , persistent foreign portfolio investor (FII) outflows, a stronger US dollar, and rising global risk aversion amid geopolitical tensions.

Traders said concerns over the Strait of Hormuz and higher US Treasury yields also added pressure on the rupee. The currency has emerged as Asia’s worst-performing currency in 2026 , depreciating over 7 per cent this year and around 1.5 per cent in the current month.

In global markets, the dollar index rose to 99.24 , reflecting continued strength in the greenback as tensions around Iran kept investors cautious. Brent crude, the global oil benchmark, eased 1.92 per cent to USD 109.95 per barrel in futures trade, though elevated oil prices continued to weigh on emerging market currencies, including the rupee.

In geopolitical developments, US President Donald Trump said he had paused fresh strikes on Iran following requests from Qatar, Saudi Arabia and the UAE, noting that diplomatic discussions with Tehran were moving towards a possible agreement.

On the domestic equity front, benchmark indices closed lower. The Sensex fell 114.19 points to 75,200.85, while the Nifty declined 31.95 points to 23,618. Despite the weak market sentiment, foreign institutional investors remained net buyers for the third straight session, investing Rs 2,813.69 crore , according to exchange data.

Market analysts expect the rupee to maintain a negative bias , though they see a short-term trading range of 96 to 96.60. They also said possible intervention by the Reserve Bank of India (RBI), along with restrictions on gold and silver imports, could provide support at lower levels.

Overall, sentiment remains cautious as sustained dollar strength, geopolitical uncertainty, and oil price volatility continue to pressure emerging market currencies, even as intermittent foreign inflows offer limited stability.