Rupee hits lifetime low of 96.47 against US dollar

The Indian rupee touched a lifetime low on Tuesday, 19 May, as elevated crude oil prices, weakness in Asian currencies and rising US bond yields continued to pressure the domestic currency.

The rupee weakened to 96.47 against the US dollar, breaching its previous all-time low of 96.3875 recorded in the previous session. The rupee opened 2 paise weaker at 96.37 per US dollar on Tuesday.

Pressure on the rupee intensified further amid weakness across Asian currencies, subdued global risk appetite, and elevated US bond yields.

The rupee has now fallen for seven consecutive sessions, losing around 2.2% during the period while repeatedly touching fresh record lows. Since the Iran conflict escalated in late September, the currency has declined more than 6%.

Brent crude hovered near $110 per barrel in Asian trade as investors closely tracked developments in possible negotiations between the US and Iran aimed at ending the conflict and reopening the Strait of Hormuz.

US President Donald Trump said a planned strike on Iran had been paused to allow room for negotiations, offering limited relief to global markets.

However, investor sentiment remained cautious, with US equity futures and Asian stock markets trading lower, keeping pressure on regional currencies, including the rupee.

Rupee Rout

The rupee has remained under intense pressure, declining around 1.5% so far this month and more than 7% in 2026, as investors struggle to find stability amid persistent global and domestic headwinds.

Analysts said capital flows are now driving the currency more than sentiment. Foreign investors have withdrawn nearly $2.6 billion from Indian equities recently, further accelerating the rupee’s slide. The broader trend remains equally concerning, with total net equity outflows in 2026 touching nearly $23.2 billion — already surpassing last year’s outflows of $18.9 billion.

Experts noted that sustained capital flight tends to amplify pressure on emerging-market currencies, and the rupee is currently bearing the full impact of those outflows.

As a result, the Indian currency has emerged as the weakest-performing Asian currency so far this year.

Ease in the US-Iran tension

US President Donald Trump said he has temporarily paused a planned strike on Iran following requests from Saudi Arabia, Qatar, the UAE and other Gulf allies, who believe there is still limited room for diplomacy.

The decision has provided some relief to global markets and crude oil prices, but investor sentiment remains cautious as both Washington and Tehran continue to resist key elements of each other’s proposals.

Analysts say that unless diplomatic progress translates into a concrete agreement and geopolitical headlines begin to stabilise, the rupee is likely to remain volatile and highly sensitive to developments in the Middle East.

Outlook

Amit Pabari, MD, Research Team, CR Forex Advisors, said that the market’s biggest challenge right now is not just direction — it’s confidence. Until there is visible cooling in global tensions and stability in foreign flows, the rupee may continue to trade under pressure, with volatility remaining elevated.

“Technically, 94.80–95.10 is expected to act as an important support zone for USDINR. However, with no meaningful signs of easing in global risk factors, the pair now appears to be gradually shifting its focus toward the 97 mark,” said Pabari.

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