Mumbai40 minutes ago
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Today, on May 19, the rupee has fallen by 18 paise against the dollar and has reached a record low of 96.47 for the first time. Earlier on Monday, the rupee had closed at the level of 96.29. There has been a continuous decline in the rupee for the last few days.
The rupee has been under pressure since the beginning of 2026. Last year, in December 2025, the rupee had crossed the 90 level for the first time. Due to this the risk of inflation increasing has increased.
Market experts believe that if crude oil prices continue to rise like this and geopolitical tension does not subside, then the rupee may soon touch the level of 100.
Main reasons for fall in rupee
US-Iran war and West Asia crisis: The increasing tension between America and Iran in the Middle East (West Asia) is the biggest reason for this decline. Due to geopolitical uncertainty, there is an atmosphere of fear in the global market, due to which investors are withdrawing money from emerging markets (like India).
Rise in crude oil prices: In the international market, the prices of Brent crude have jumped to close to $ 110 per barrel. India imports more than 85% of its crude oil needs. Due to oil becoming expensive, India’s import bill has increased and the demand for dollars has increased rapidly.
Blockade of Hormuz Route: The oil supply chain has been badly affected due to the blockade and obstructions on the Strait of Hormuz, the most important route for oil supply from Gulf countries.
Selling by foreign investors (FII): In view of the uncertainty in the global markets, foreign institutional investors (FIIs) have continuously withdrawn their money from the Indian stock market. When foreign investors withdraw money from the Indian market and convert it into dollars, pressure on the rupee increases.
Strong dollar and rise in US bond yields: The demand for the US dollar as a safe investment has increased significantly across the world, which has strengthened the dollar index. Along with this, due to increase in American bond yields, investing in dollars has become more profitable for investors.
Danger of inflation increasing in India due to dollar becoming expensive
The Middle East conflict is being considered as the most serious energy crisis in decades, which is directly impacting India.
- oil prices: India’s import bill has increased due to expensive crude oil.
- Essential goods expensive: Supply of LPG, plastic and other petrochemical products affected.
- Fear of inflation: Due to the dollar becoming expensive, petrol, diesel and imported goods will become expensive, due to which retail inflation may increase.
- Studying and traveling abroad is expensive: Now you will have to spend more money to buy dollars for going abroad or for studies.
- Electronics Expensive: Mobiles, laptops and imported parts can be expensive, as payment is in dollars.
How is the value of currency determined?
If the value of a currency decreases against the dollar, it is called currency depreciation.
Every country has foreign currency reserves, through which international transactions take place. Its increase and decrease affects the currency.
If there are enough dollars in India’s foreign reserves, the rupee will remain stable. If the dollar decreases, the rupee will weaken; if it increases, it will become strong.
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