Rupee Slips to Historic Low of 96.14 as Oil Prices and Strong Dollar Pressure Worsen

The Indian rupee came under intense pressure on Friday, slipping below the psychologically important 96 per dollar mark and touching a fresh intraday record low of 96.14 against the US dollar . The currency opened at 95.86 but quickly lost ground amid sustained selling pressure, reflecting a combination of global risk aversion, firm crude oil prices and a strong dollar backdrop.

Forex traders said the USD/INR pair remained under stress due to elevated crude oil prices , persistent capital outflows, and weak net FDI inflows, all of which have continued to weigh on India’s balance of payments position . The broader sentiment was also hurt by ongoing global uncertainty and relatively high asset valuations, which have limited foreign investment inflows.

A stronger US dollar added to the pressure, with the dollar index rising to 99.28 , supported by better US economic data and hawkish signals from policymakers, reducing expectations of aggressive rate cuts by the Federal Reserve . At the same time, Brent crude oil surged to around 109.20 dollars per barrel , intensifying concerns for India, which imports over 85 per cent of its crude requirement.

Geopolitical developments also kept markets on edge. Talks between US President Donald Trump and Chinese President Xi Jinping were described as “historic” and “landmark,” but failed to produce concrete agreements on key issues, including trade tensions and Iran-related concerns. This added to broader uncertainty across Asian currency markets.

On the domestic front, inflation worries persisted after the government raised petrol and diesel prices by ₹3 per litre , while tighter gold import rules and higher duties on precious metals further signaled attempts to control external imbalances. However, Foreign Institutional Investors turned net buyers, purchasing ₹187.46 crore worth of equities, offering limited support to sentiment.

In trade data, India’s exports rose 13.78 per cent to 43.56 billion dollars in April , while imports climbed 10 per cent to 71.94 billion dollars, leaving a trade deficit of 28.38 billion dollars , highlighting continued external pressure.

Equity markets also reflected the strain, with the Sensex slipping 130.74 points to 75,267.98 and the Nifty declining 17.60 points to 23,672.00 , as currency weakness and high energy costs weighed on sentiment.

Analysts expect the rupee to remain under pressure in the near term unless crude prices stabilize and the dollar index cools from elevated levels.