Rupee hits all-time low of 95.50 against dollar

The Indian rupee fell to a record low of 95.50 against the US dollar on Tuesday (May 12), pressured by elevated crude oil prices and persistent uncertainty surrounding the fragile ceasefire between the United States and Iran.

The domestic currency opened at 95.50 per dollar, weaker than Monday’s (May 11's) close of 95.31, amid a broader risk-off sentiment across global markets.

The currency has remained under pressure since the Iran conflict escalated in late February, triggering a sharp rally in global oil prices. While intermittent intervention by the Reserve Bank of India has helped limit volatility at times, traders said the broader sentiment toward the rupee remains fragile.

Market concerns resurfaced after US President Donald Trump said on Monday (May 11) that the ceasefire between Washington and Tehran was “on life support,” pointing to disagreements over key issues including the lifting of US naval restrictions, resumption of Iranian oil exports, compensation for war-related damages, and halting hostilities across multiple fronts.

The remarks renewed fears of prolonged supply disruptions in the Persian Gulf, a critical oil-producing region.

“Oil prices remain highly sensitive to noise around Iran, highlighting the significance of the ongoing supply disruptions in the Persian Gulf,” ING Bank said in a note.

Brent crude futures rose about 1% to $105.22 per barrel and have climbed roughly 46% since the conflict began, adding to concerns for India, which imports the bulk of its crude oil requirements.

The rise in oil prices has also intensified worries over India’s current account deficit and imported inflation, both of which tend to weigh on the rupee.

Asian currencies and equities also weakened on Tuesday (May 12), while US equity futures slipped and Treasury yields edged higher, reflecting broader risk aversion across global markets.

Investor sentiment was further impacted after Prime Minister Narendra Modi on Sunday called for measures aimed at reducing fuel consumption, including encouraging work-from-home practices and curbing non-essential travel and imports.

-With Reuters inputs