Rupee falls below 96 per dollar mark for 1st time:Indian currency is Asia’s worst-performing currency so far in 2026

The rupee on Friday, May 15, 2026, fell below the 96 per US dollar mark for the first time in history. India’s currency hit record low of 96.07 against the US dollar during Friday’s trading session. The rupee has been continuously declining for the past few days. The local unit has been under pressure since the beginning of 2026. Last year in December 2025, the rupee crossed the 90 level for the first time. This increased the risk of rising inflation. Market experts believe that if crude oil prices continue to rise in this manner and geopolitical tensions do not ease, the rupee could soon touch the 100 level as well. Major Reasons for Rupee Decline West Asia Tensions: The growing tension between America, Israel, and Iran and the fear of supply disruption in the Hormuz route has created panic in the market. Due to the war, investors are fleeing towards the dollar for safe investment. Crude Oil Prices: India imports more than 85% of its crude oil requirements. In the international market, Brent Crude has crossed $107 per barrel. With oil becoming expensive, India has to pay more dollars, which has increased pressure on the rupee. Strengthening Dollar Index: The Dollar Index, which measures the strength of the dollar against 6 major world currencies, has reached the level of 99.05. When the dollar strengthens in the global market, the rupee and other Asian currencies weaken. Foreign Investor Withdrawal: Foreign Institutional Investors are continuously withdrawing money from the Indian stock market. On Wednesday alone, FIIs sold shares worth more than ₹4,700 crore. Due to dollars leaving the market, the value of the rupee is declining. Fear of Rising Inflation: India’s Wholesale Price Index (WPI) has reached a three-and-a-half-year high. The rising energy prices have increased the threat of ‘imported inflation’, which has dampened economic sentiment. Dollar Expensive, Risk of Inflation Rising in India The West Asia conflict is being considered the most serious energy crisis in decades, which is directly impacting India. Oil Prices: Rising crude oil prices have increased India’s import bill. Essential Goods Expensive: Supply of LPG, plastic and other petrochemical products affected. Fear of Inflation: With the dollar becoming expensive, petrol-diesel and imported goods will become costlier, which may increase retail inflation. Studying-Traveling Abroad Expensive: Now more rupees will have to be spent on buying dollars for going abroad or for education. Electronics Expensive: Mobiles, laptops and imported parts may become expensive, as payment is made in dollars. How is Currency Price Determined? When the value of a currency decreases against the dollar, it is called currency depreciation or weakening. Every country has foreign currency reserves, which are used for international transactions. The increase or decrease in these reserves affects the currency. If India has sufficient dollars in its foreign reserves, the rupee will remain stable. If dollars decrease, the rupee weakens; if these increase, it strengthens. ​