Mumbai | April 30, 2026 – The Indian rupee plunged to a historic low of ₹95.20 against the US dollar in early trade on Thursday, shedding 32 paise amid soaring global crude prices and escalating US-Iran tensions that have rattled markets worldwide
Panic in early deals
At the interbank forex market, the rupee opened weakly at ₹95.01 before sliding further to breach the psychologically crucial 95 mark – a level never seen before. Wednesday’s close was already a record low of ₹94.88, down 20 paise. Traders blame relentless pressure from Brent crude touching $122 per barrel, the highest since 2022, as stalled US-Iran peace talks fuel fears of supply disruptions.
“Crude at $122 is a nightmare for import-dependent India,” said Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors. “With 85% oil imported, every dollar rise drains forex reserves and stokes inflation.”
Geopolitical storm fuels dollar rush
Fresh diplomatic friction between Washington and Tehran triggered safe-haven buying in the dollar. The dollar index edged up 0.01% to 98.96, while hawkish Fed signals kept US yields elevated. FIIs offloaded $2.1 billion in equities this month, adding to the rupee’s woes.
Domestic equities mirrored the gloom: BSE Sensex tumbled 822 points to 76,675, Nifty shed 287 to 23,890. Banking and auto stocks bore the brunt, hit by import cost fears.
RBI’s balancing act
The Reserve Bank of India (RBI) is expected to intervene aggressively, having sold $25 billion in dollars since January to defend the rupee. Forex reserves stand at $682 billion, providing a buffer, but analysts warn sustained crude above $120 could force more sales.
“RBI faces a tightrope: defend the rupee without depleting reserves or sparking capital flight,” noted Jigar Patel of Anand Rathi Shares. Gold imports, already up 25%, could balloon, pushing current account deficit to 2.8% of GDP.
What triggered the slide?
- Oil shock: Brent’s 2.6% jump to $122 amid Strait of Hormuz blockade fears.
- US-Iran deadlock: No breakthrough in talks, Iran blocking tankers.
- FII exodus: $2.1B net sell-off on rate hike bets.
- Strong dollar: Fed’s hawkish stance props up greenback.
Outlook: More pain ahead?
Experts predict rupee testing ₹96 soon if oil stays elevated. “Intervention alone won’t suffice; fiscal measures like duty cuts on fuel needed,” said Madhavi Arora of Emkay Global. Positive note: Robust services exports ($350B FY26 target) offer some cushion.
Government sources hint at oil hedging and bond issuance to stabilise. Investors watch Friday’s US jobs data for Fed clues.
As middle-class families brace for petrol crossing ₹150/litre and inflation biting wallets, the rupee’s freefall underscores India’s vulnerability to global shocks. Will RBI’s war chest hold? Markets await.
