Indian rupee falls to 94.90 against the US dollar as geopolitical tensions and rising oil prices rattle markets. Read the full analysis on currency trends here.
The Indian rupee slipped sharply on Monday, falling 139 paise to 94.90 against the US dollar in early trade, as renewed geopolitical tensions in West Asia triggered a spike in crude oil prices and strengthened the American currency.
The decline comes after US President Donald Trump rejected Iran’s response to a proposed peace plan, rattling global markets and pushing investors toward safe-haven assets.
At the interbank foreign exchange market, the rupee opened weaker at 94.97 and briefly recovered to 94.90, but still remained far below its previous close. On Friday, the domestic currency had surprisingly rebounded, ending the session with a strong gain of 71 paise at 93.51 per dollar.
Why is the rupee under fresh pressure again?
The latest slide in the rupee is being driven by a mix of global risk factors rather than domestic weakness alone. The sharp escalation in geopolitical uncertainty has led to a spike in crude oil prices, a stronger US dollar, and sustained foreign investor outflows from Indian equities.
Market analysts noted that Brent crude surged more than 4% to around USD 105.5 per barrel in futures trade, intensifying concerns for India, which remains heavily dependent on oil imports.
A currency market expert said global risk sentiment deteriorated after fresh developments in the US-Iran standoff, adding pressure on emerging market currencies like the rupee. Safe-haven demand for the dollar index also climbed, pushing it higher to 98.20.
How global oil and dollar strength are deepening rupee losses
The rupee’s decline is closely tied to rising crude oil prices, which directly impact India’s import bill and inflation outlook. With Brent crude crossing the USD 105 mark, traders fear wider current account pressure in the coming months.
At the same time, the US dollar index gained 0.20%, reflecting stronger demand for dollar-denominated assets amid global uncertainty. Foreign portfolio investors also offloaded Indian equities worth over ₹4,110 crore in the previous session, adding further pressure on the currency.
Escalating tensions involving Iran, Israel, and regional militant groups have kept global markets on edge. Reports of continued military exchanges and drone activity have further heightened risk aversion, pushing investors toward safer assets like the US dollar and crude-linked commodities.
This external volatility has also overshadowed domestic fundamentals, despite earlier support from the Reserve Bank of India, which had intervened near the 94.70 level in the previous session to stabilise the currency.
Will the rupee remain under pressure going ahead?
Market participants expect the rupee to remain sensitive to crude oil movements, US monetary policy signals, and geopolitical developments. Persistent foreign fund outflows and a widening trade deficit due to higher oil prices could keep the currency on a weak footing in the near term.
With PTI inputs
Published: 11 May 2026, 10:36 am IST
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