Continuing its sharp FY26 depreciation—after breaching 94 in late March—the Indian rupee fell to a fresh record low of 95.28 against the US dollar on Tuesday, May 5. Oil prices exceeding $110 a barrel have intensified inflation and balance-of-payments worries, prompting Reserve Bank of India interventions amid curbs on foreign exchange positions.
The rupee's slide past 95 triggered restrictions on FX positions, as reported by The Economic Times. Brent crude futures holding above $110 fueled risk aversion, curbed capital inflows, and amplified pressure on India's currency. The RBI intervened to provide support, but persistent oil concerns and external vulnerabilities pose ongoing challenges.
Speculation is growing around additional measures, such as incentives for Non-Resident Indian dollar deposits, to boost foreign exchange reserves. No timeline has been confirmed. These developments underscore India's exposure to global oil dynamics and investor sentiment, with RBI actions offering temporary relief but sustained recovery hinging on easing energy prices and stronger inflows.
This milestone follows earlier FY26 lows, including 93.73 in March and nearing 95 amid Gulf tensions, marking the rupee as Asia's worst performer with a 9.9% annual decline.
