Indian Rupee Declines 11 Paise to 95.87 Against US Dollar

Indian Rupee Falls to Fresh Record Lows for Three Consecutive Sessions

The Indian rupee opened 11 paise weaker at 95.87 against the US dollar on Friday, 15 May, as rising US Treasury yields strengthened the dollar and added to pressure from elevated crude oil prices. The currency has now fallen to fresh record lows for three consecutive sessions, declining around 1.36% this week. Bankers said the pace of depreciation has likely been moderated by the Reserve Bank of India's intervention.

The rupee hit an unprecedented intraday low of 95.9575 per dollar on Thursday before recovering slightly. Recent indications of potential measures to draw in dollar inflows and alleviate pressure on the currency provided only temporary support, as the rupee quickly resumed its downward trend thereafter. Ongoing foreign equity withdrawals, high dollar demand from oil marketing firms and importers, and limited dollar sales from exporters continue to negatively impact the domestic currency.

Brent Crude Prices Remain High at $107 per Barrel

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Brent crude prices remained high at around $107 per barrel, indicating ongoing pressure from energy costs. With India importing nearly 90% of its crude oil needs, the rupee is particularly susceptible to fluctuations in oil prices. Investors are paying close attention to the outcomes of the discussions between Donald Trump and Xi Jinping.

Impact of the Dollar

According to experts, the Dollar Index extended gains for a fourth consecutive session after stronger-than-expected US retail sales data and resilient labour market indicators reduced expectations of aggressive Federal Reserve rate cuts. CME FedWatch data now shows the probability of another 25-basis-point Fed rate hike by December rising to nearly 37%, up from around 22% a week ago.

Higher US interest rates typically attract global capital to dollar-denominated assets, putting pressure on emerging-market currencies such as the rupee. Experts also pointed to lingering geopolitical uncertainty following the meeting between Donald Trump and Xi Jinping. While both leaders attempted to project stability, disagreements over Taiwan and China’s continued oil purchases from Iran kept global tensions elevated.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

The dollar tends to strengthen during periods of uncertainty as investors seek safe-haven assets. As a result, the rupee remains under pressure from a combination of high crude oil prices, persistent dollar strength, and global inflation concerns, despite domestic policy support.

Rupee Outlook

"Technically, the 94.50–94.80 zone is expected to act as a strong support area for USDINR, while 96.00–96.20 remains a major resistance zone," said Amit Pabari, MD, Research Team, CR Forex Advisors.