Indian Rupee Hits Record Low Amid Global Tensions and Market Reactions

The Indian rupee has reached a record low of 95.31 against the US dollar, influenced by global tensions and domestic economic measures. Following US President Trump's rejection of Iran's peace proposal, crude oil prices surged, further impacting market sentiments. Prime Minister Modi's call for austerity, including reduced gold purchases and foreign travel, aims to conserve foreign exchange but may slow economic growth. As the dollar strengthens and foreign capital exits, the rupee's future remains uncertain. Explore the full article for detailed insights into this economic situation.

By Narendra Chaudhary May 11, 2026, 18:29 IST

Rupee Plummets to New Low

Mumbai: The Indian rupee fell by 82 paise, closing at a historic low of 95.31 against the US dollar on Monday. This decline followed US President Donald Trump's dismissal of Iran's response to a peace proposal in West Asia, which led to a sharp increase in crude oil prices.

Prime Minister Narendra Modi's call for citizens to refrain from purchasing gold and to adopt austerity measures further impacted market confidence.

Forex traders noted that a robust US dollar and significant outflows of foreign capital added to the pressure on the rupee.

In the interbank foreign exchange market, the rupee began trading at 94.97 and fluctuated between 94.87 and 95.34 before settling at 95.31, down from the previous close of 94.49.

Iran has communicated its response to the US ceasefire proposal through Pakistani intermediaries, seeking negotiations aimed at a permanent resolution to the ongoing conflict, according to state media reports.

Trump labeled Iran's proposal as 'totally unacceptable' without providing further details, even as a prominent Republican suggested considering military options.

On Sunday, PM Modi urged the public to use fuel wisely and delay purchases of gold and international travel to conserve foreign exchange amid the escalating conflict in West Asia.

"PM Modi's request for reduced spending on petrol, gold, and foreign trips aims to save foreign reserves and manage the fiscal deficit. However, these measures may lead to a slowdown in economic growth in the short term," stated Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.

"Trump's rejection of Iran's response has driven oil prices to around USD 105 and pushed the dollar index above 98, keeping demand strong. The rupee is anticipated to fluctuate between 94.75 and 95.50 on Tuesday," he added.

The dollar index, which measures the dollar's strength against a basket of six currencies, was at 98.02, reflecting a 0.13 percent increase.

Brent crude oil, the global benchmark, saw a rise of 2.52 percent, reaching USD 103.8 per barrel in futures trading.

In the domestic stock market, the Sensex dropped by 1,312.91 points, or 1.70 percent, closing at 76,015.28, while the Nifty fell by 360.30 points, or 1.49 percent, to 23,815.85.

Foreign Institutional Investors sold equities worth Rs 4,110.60 crore on Friday, according to exchange data.

India's foreign exchange reserves decreased by USD 7.794 billion to USD 690.693 billion for the week ending May 1, as reported by the RBI. This follows a decline of USD 4.82 billion in the previous week, bringing reserves down from USD 698.487 billion.