The Indian rupee crashed to a fresh record low of 95.86 against the US dollar in early trade on Thursday, depreciating 20 paise from its previous close of 95.66. According to The Tribune, the currency opened on a weak note and witnessed significant intraday volatility, touching an all-time intraday low of 95.96 and a high of 95.61 against the dollar. The rupee has now weakened by more than 6% against the dollar since the West Asia conflict began, making it the worst-performing currency in Asia so far in 2026. With Thursday's move, the currency has now touched a fresh intraday low, highlighting how strongly global risk factors are impacting India. The rupee has declined 1.4% this week and hit record lows in each trading session between Tuesday and Thursday, demonstrating the sustained pressure on the domestic currency.
In a major move aimed at protecting foreign exchange reserves, India raised import duties on gold and silver from 6% to 15%, as reported by Business Standard. However, traders indicated that the rupee's path will be shaped less by gold and more by crude's trajectory and the West Asia situation. This intervention comes as the currency continues to face pressure from elevated crude oil prices and ongoing geopolitical tensions in the West Asia region. The government's decision to increase import duties on precious metals reflects the urgent need to conserve foreign exchange reserves amid the current crisis.
Wholesale price inflation surged to a 42-month high of 8.3% in April driven by disruptions from the West Asia conflict, according to data released by the commerce and industry ministry. This represents a sharp increase from 3.88% in March and 0.85% in April last year. As per PTI, the positive inflation rate is primarily attributed to increases in prices of mineral oils, crude petroleum & natural gas, basic metals, other manufacturing and non-food articles. The West Asia crisis and the blockade of the Strait of Hormuz have disrupted crude petroleum imports into India, with the sharp rise in crude prices making fuel imports significantly costlier. The rupee's direction is being influenced more by crude oil prices and the West Asia situation than by gold flows, according to traders, with geopolitical headlines swinging market sentiment almost every few hours.
Forex traders expect the rupee to trade with a negative bias amid inflation concerns and a strong dollar, according to Anuj Choudhary, Research analyst at Mirae Asset ShareKhan. As reported by PTI, Choudhary noted that rising inflation in the US dimmed expectations of a rate cut by the Fed, while geopolitical tensions between the US and Iran and foreign fund outflows may also pressure the rupee. However, any intervention by the RBI and import duty hike on gold and silver may support the rupee at lower levels. USD/INR spot price is expected to trade in a range of 95.50 to 96.10, according to Choudhary's analysis. The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 98.51, down 0.01%.
Adding to the uncertain global backdrop, Brent crude, the global oil benchmark, was trading higher by 0.50% at USD 106.16 per barrel in futures trade, as reported by PTI. The leaders of the world's two largest economies are scheduled to have several rounds of talks covering the Iran war, trade, technology, and Taiwan. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 98.51, down 0.01%. The visit by President Trump is taking place against a backdrop of rising economic and geopolitical uncertainty, including conflicts in the West East and a global energy shock that has hit Asia hardest.
