The rupee breached the Rs 96.50 per dollar level on May 19, after consistently elevated Brent crude prices dampened investor sentiment for the currency, while sustained tensions in West Asia continued to add pressure on the Indian unit.

The rupee fell to a record low of Rs 96.52 per dollar, as compared to Rs 96.35 per dollar in the previous trading session. The rupee had opened at Rs 96.37 per dollar, and moved within a 25-paise range throughout the day.

This move brings the rupee’s losses to more than 6 percent since the start of the year, and marks the eighth straight session of declines in the currency. The rupee has emerged as the worst-performing Asian currency so far this year.

Brent crude prices were trading at $110 per barrel, even as they fell nearly 2 percent overnight, after US President Donald Trump said he would pause a potential attack on Iran to allow for negotiations for the war in West Asia to come to an end.


Earlier in the day, the Indian government decided to hike fuel prices by at least 90 paise for the second time in a week, after the government announced a Rs 3 per litre hike a few days ago. This would mark the government’s first hike in retail fuel prices in four years.

Higher energy prices are detrimental to the Indian rupee, considering that India is a net oil importer, which imports nearly 85 percent of its energy needs. Elevated oil prices will increase the import bill and widen the current account deficit. Additionally, foreign investors have pulled out nearly $2.6 billion from Indian equities, according to recent data.