The Indian rupee plunged to a fresh record low against the US dollar on Monday, 18 May, as elevated crude oil prices amid the Iran conflict continued to pressure global markets and weaken risk sentiment.
The domestic currency opened 20 paise lower at 96.17 and soon extended its decline, down almost 31 paise, to reach a new record low of 96.27 against the greenback.
The rupee has emerged as Asia’s worst-performing currency so far in 2026, declining by around 5.5% since the war in Iran began on 28 February. Monday also marked the fifth straight session in which the currency touched a new all-time low.
The Reserve Bank of India (RBI) is believed to have intervened on Friday, helping the rupee bounce back above 96, Reuters reported. The central bank has been frequently stepping in to ease the impact of rising oil prices, as reported by Reuters.
On Monday, the 10-year US Treasury yield rose 4 basis points to4.6250%, building on Friday’s 14-basis-point surge. Concerns about sustained high oil prices are heightening inflation worries and driving a selloff in Treasuries, with yields in Europe, the UK, and Japan also rising.
Before last week, US yields had remained stable within a narrow range since the onset of the Iran conflict, likely indicating hopes for a resolution. However, that situation has shifted, and the 10-year yield is on a significant rise.
Dollar benefiting from the situation
According to experts, rising global uncertainty has once again triggered a flight to safe-haven assets, strengthening the US dollar and putting additional pressure on emerging-market currencies such as the Indian rupee.
The dollar index has climbed to near 99.30 amid increased demand for safer assets. Analysts noted that stronger-than-expected US economic data has further supported the greenback. US industrial production rose 0.7% in April 2026 — the strongest monthly increase in 14 months and significantly above market expectations of 0.3%.
Experts said resilient US economic indicators are reducing expectations of aggressive Federal Reserve rate cuts, thereby keeping global capital tilted toward dollar-denominated assets.
To ease pressure on the external sector, India has recently tightened restrictions on gold and silver imports across most categories, effective immediately. The move is aimed at curbing non-essential imports and reducing dollar outflows.
Experts believe the latest measures, along with earlier government and RBI interventions, are intended to support the rupee and contain the widening current account deficit.
Rupee Outlook
Amit Pabari, MD, Research Team, CR Forex Advisors, said that for now, elevated crude oil prices, global uncertainty, and a stronger dollarremain key risks for the rupee. However, the encouraging sign for markets is that both the Government and the RBI have already started taking proactive measures to manage the situation before it becomes more uncomfortable.
“Technically, 94.80–95.10 is expected to act as an important support zone for USDINR, while 96.00–96.50 remains a strong resistance area in the near term,” said Pabari.
Ponmudi R, CEO of Enrich Money, added that USD/INR opened above ₹96 and is trading close to all-time highs while continuing to respect the rising trendline structure that underpins the broader bullish bias.
“Immediate resistance stands at ₹96.30– ₹96.40; a sustained move above this zone could extend rupee weakness toward ₹96.50. On the downside, ₹95.70 acts as immediate support, with ₹95.40– ₹95.20 as stronger bases at the rising trendline if a short-term correction occurs,” said Ponmudi.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
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