The central bank is believed to have intervened, leading to a pull back in the Rupee. | Photo Credit: FRANCIS MASCARENHAS

The Rupee sank to a record low as the US and Iran hardened their stand on ending the West Asia war, sending crude oil prices higher and accentuating FPI sales in the domestic stock markets.

The Indian currency closed 32 paise down at an all time low of 95.6275 per US Dollar. Intraday, it fell to a record low 95.7375 per dollar, surpassing the previous low of 95.4325.

The central bank is believed to have intervened, leading to a pull back in the Rupee.

Forex market dealers said at the current rate of depreciation, the Rupee may vault over the 96 per US Dollar mark in the next 3-4 trading sessions.

Brent Crude oil jumped about 3 per cent to about $107 per barrel as the impasse on ending the West Asia conflict continued.

FPI pulled out investments worth $822 million on Tuesday, leading to Dollar demand from custodial banks for repatriation purposes.

CareEdge Ratings, in a report, noted that since the onset of the West Asia conflict, most currencies have depreciated against the US dollar, with a few exceptions such as the BRL (Brazilian Real), CNY (Chinese Yuan), and GBP (Pound).

Depreciation is particularly large for currencies like the Philippine Peso, Indian Rupee, South African Rand, Thai Baht, Korean Won, and Indonesian Rupiah, as these economies are highly dependent on West Asia for energy imports, it added.

bigger hit

The agency said given the exposure to the West Asia crisis, Asian currencies have taken a bigger hit compared to their global peers.

The report observed that while such depreciation is largely expected amid rising energy prices and capital flows shifting toward safe-haven assets like the US dollar, the weakness in the Indian rupee has been a more persistent concern over the past year, even before the conflict.

“Weak capital flows in the last year have been a major factor behind the weakening pressure on the rupee. The recent escalation in tensions in West Asia has only intensified these downward pressures. The persistent weakness in the rupee is evident from its 11% depreciation over the past year, of which 4.7 per cent occurred since the war started,” per the report.

Meanwhile, yield of the benchmark 10-year Government Security (6.48 per cent GS2035) edged up to close at 7.0458 per cent against the previous close of 7.03 per cent due to rising global crude oil prices.

G-Sec yields could rise further as the April retail inflation reading nudged up to 3.5 per cent against 3.4 per cent in March.

Dipanwita Mazumdar, Economist, Bank of Baroda, said: “India remains relatively insulated from global inflation shocks for now due to regulated fuel price pass-through. However, vigilance is needed on food inflation, weather-related disruptions, and geopolitical developments.”

Published on May 12, 2026