Rupee Hits Record Low: Will Rising Oil Prices Push USD/INR Towards 100? | PL Capital

Mumbai | 18 May 2026 

The Indian rupee opened at a fresh all-time low of 96.17 against the US dollar on Monday, weakening 21 paise from its previous close. Brent crude trading above $111 per barrel, escalating West Asia tensions, and a stronger US dollar dragged the local currency lower. Indian benchmark indices opened over 1 percent down, reflecting broad-based weakness. 

Why Did the Rupee Hit a Fresh Record Low? 

The rupee opened at 96.17 per dollar on Monday, slipping 21 paise from the previous close of 95.96. The currency had breached the psychological 96-per-dollar mark for the first time on Friday, hitting an intraday low of 96.14 before closing at 95.97. 

Since the West Asia crisis began, the rupee has weakened 5.5 percent. Pressure has built from sustained foreign investor outflows, elevated crude oil prices, and a widening import bill. 

How Are Oil Prices Affecting the Rupee? 

Brent crude climbed more than 1 percent overnight to trade above $111 per barrel. The move followed reports of an attack on a nuclear plant in the United Arab Emirates. Efforts towards a peace deal between the United States and Iran have come under strain. 

US President Donald Trump is expected to consider military options against Iran in upcoming discussions. A meeting between Trump and Chinese Premier Xi Jinping concluded without a notable outcome, adding to risk-off sentiment across emerging market assets. 

Higher crude prices directly widen India’s import bill and current account deficit, given the country’s heavy reliance on imported oil. 

What Steps Has the RBI Taken? 

Indian authorities have rolled out measures to slow the rupee’s decline. Most silver imports were curbed over the weekend, shortly after import tariffs on silver and gold had been lifted. The Reserve Bank of India has stepped into currency markets and tightened rules around banks’ net open positions. 

How Did Indian Equity Markets React? 

Dalal Street opened sharply lower on Monday. Nifty50 opened at 23,396.45, down 247 points or 1.04 percent. BSE Sensex opened at 74,430.35, down 808 points or 1.07 percent. Both benchmarks slipped over 1 percent at the open. 

Outlook 

The rupee’s record slide has intensified concerns over India’s macroeconomic position. A larger-than-expected trade deficit and muted capital inflows have left the economy more exposed to external shocks. Crude oil prices, the path of West Asia tensions, and RBI’s intervention pace will shape the rupee’s trajectory in the sessions ahead. 

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