Rupee touches fresh record low of 95.85 against the US dollar

The rupee hit a fresh record low today (Thursday, 14 May), breaching the 95.85 mark against the US dollar amid persistent external pressures.

The rupee opened 2 paise lower at 95.73 against the US dollar on Thursday, 14 May, weighed down by persistent oil-related pressures that have lingered in recent weeks. It had settled at 95.7050 in the previous session, after hitting a lifetime low of 95.7950.

The rupee fell 0.1% to 95.8525 against the US dollar, surpassing its prior all-time low of 95.7950 set in the last trading session.

This week, the rupee has dropped 1.4% and has registered all-time lows on every trading day from Tuesday to Thursday.

The rupee has declined by over 6% against the US dollar since the onset of the West Asia conflict, positioning it as the worst-performing currency in Asia for 2026 thus far.

Brent crude prices remained relatively stable around $106 per barrel as investors awaited an important meeting between Donald Trump and Xi Jinping, with the ongoing conflict in Iran the primary concern.

Despite Trump suggesting that US efforts to address the 11-week conflict might not hinge on China's involvement, he is expected to ask for Xi’s backing during their talks.

India’s external position begins to feel the heat

According to experts, India’s external position is beginning to come under increasing pressure. The country’s merchandise trade deficit widened to over $330 billion in FY26, marking a sharp rise from the previous year.

They also point out that since the onset of the Iran conflict, India’s forex reserves have declined by nearly $38 billion, making it one of the steepest drawdowns among regional peers.

Further, analysts note that the RBI’s forward book reflects mounting strain, with the central bank’s net short forward position expanding to around $103 billion by March-end. This suggests the need for sustained intervention to curb volatility, which could constrain the RBI’s ability to manage future currency pressures.

Gold imports add fresh pressure on the rupee

According to experts, rising import costs are beginning to weigh heavily on the rupee, with everything from jewellery to fuel becoming more expensive. They note that India’s decision to raise gold and silver import duties from 6% to 15% comes amid surging external pressures. India’s precious metal imports have jumped to $84 billion in FY26 from $35.5 billion a decade ago, while higher crude prices have further strained the balance of payments, adding pressure on the currency.

Rupee Outlook

According to Amit Pabari, MD, Research Team, CR Forex Advisors, technically, the 94.50–94.80 zone is expected to act as a strong support area for USDINR, while 95.80–96.00 remains a crucial resistance region.

“Since 96 is also a psychological level for the market, the pair may face strong resistance near these levels and might not break above it immediately unless supported by fresh global triggers or panic-driven dollar demand,” said Pabari.

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