The Indian rupee touched a record low on Friday as soaring crude oil prices and concerns over inflation and trade deficits intensified pressure on the economy.
May 15, 2026: The Indian rupee weakened to a fresh all-time low on Friday as global crude oil prices surged close to $110 per barrel amid the ongoing Iran conflict. The rupee fell 0.4 per cent to 96.1350 against the US dollar during trade, crossing its previous record low touched a day earlier. The currency eventually closed at 95.9650, registering a weekly decline of 1.5 per cent.
The sharp fall in the rupee comes as India, the world’s third-largest crude oil importer, faces mounting pressure from rising energy costs, widening trade deficits and persistent capital outflows. The rupee has now declined more than 6 per cent so far this year, making it the worst-performing currency in Asia. Brent crude futures rose over 3 per cent to around $109 per barrel, intensifying concerns over inflation and higher import bills for energy-dependent economies like India.
Analysts warned that if the West Asia conflict continues for a prolonged period, it could weaken economic growth while increasing inflationary pressures across the region. Data released on Friday showed India’s merchandise trade deficit widened to $28.38 billion in April as higher oil prices and disruptions in energy shipments impacted imports. India imports more than 80 per cent of its crude oil requirements and nearly 60 per cent of its cooking gas needs.
The rise in oil prices has also affected financial markets, with India’s 10-year bond yield climbing to a more than five-week high of 7.07 per cent. Meanwhile, benchmark stock index Nifty 50 fell more than 2 per cent during the week. Economists now expect inflationary pressures to persist, with some forecasting further interest rate hikes later this year to stabilise prices and support the currency.