Forex
Indian Rupee Slumps to Record Lows Amid Oil Price Surge
The Indian rupee has hit record lows against the US dollar in May 2026, driven by high oil prices, persistent portfolio outflows, and a widening trade deficit. The currency's value has fallen to 96.70 per US dollar amid rising Brent crude prices near USD 110 a barrel.
The Reserve Bank of India sold dollars from reserves to reduce volatility, but this action can only slow swings, not change core trends. Market attention is now focused on the 100-per-dollar level, with concerns about inflation and external balances growing.
The trade deficit widened in April as imports rose faster than exports, reaching USD 28.4 billion. Foreign investors have been moving funds into US assets, leading to net equity outflows of USD 23.2 billion in 2026.