The rupee slipped to a fresh record low of 96.47 against the U.S. dollar in intraday trade on Tuesday (May 19, 2026), pressured by rise in crude oil prices, strong dollar and geopolitical uncertainties.

The rupee is Asia's worst-performing currency in 2026, having tumbled to a historic intraday low of 96.47 against the U.S. dollar. The currency has depreciated 1.5 per cent this month and more than 7% this year.

Forex traders said the rupee remains vulnerable to the rise in crude oil prices, as also the closure of the Strait of Hormuz.

At the interbank foreign exchange market, the rupee opened at 96.38 against the U.S. dollar, then lost further ground and touched a record low of 96.47, registering a fall of 27 paise over its previous close.

On Monday (May 18, 2026), the Indian rupee settled at a record low of 96.20 against the US dollar.

"Foreign investors have pulled out nearly $2.6 billion from Indian equities, adding fuel to the currency’s decline. In fact, the broader picture is even heavier — net equity outflows in 2026 have already reached $23.2 billion, crossing last year's total of $18.9 billion. When capital leaves in waves, currencies rarely stand still — and the rupee is bearing that full weight," CR Forex Advisors MD Amit Pabari said.

Economists at HSBC estimate India could face a Balance of Payments (BoP) deficit of around $65 billion in FY27, marking a third consecutive year of external imbalance pressure.

"It's not just a cycle — it’s becoming a pattern the market is now pricing in," Mr. Pabari said.

Meanwhile, U.S. President Donald Trump said he has temporarily held back a planned strike on Iran after requests from Saudi Arabia, Qatar, the UAE and other Gulf allies.

While the pause has offered temporary relief to global markets and crude oil prices, markets remain cautious as both Washington and Tehran continue to reject key parts of each other’s proposals.

"Still, until diplomacy turns into reality and headlines stop changing every few hours, the rupee may continue trading with a nervous heartbeat," Mr. Pabari said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 99.16, lower by 0.03% due to simmering Iran tensions.

Brent crude, the global oil benchmark, was trading down 1.43% at $110.50 per barrel in futures trade.

On the domestic equity market front, Sensex was trading 266.84 points higher at 75,581.88, while the Nifty advanced 78.45 points to 23,728.40.

Foreign Institutional Investors remained net buyers for the third straight session, purchasing equities worth Rs 2,813.69 crore on Monday, according to exchange data.