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Informist, Monday, May 18, 2026

By Divya Moolayattil

MUMBAI – The rupee fell sharply against the dollar and settled at a record closing low for the sixth consecutive trading day as crude oil prices stayed above $110 a barrel amid fresh escalation in the West Asia war, dealers said. Continuous foreign portfolio outflows from Indian equity markets also weighed on the Indian unit, they said. However, the losses in the Indian unit were limited as the Reserve Bank of India intervened through dollar sales passively during the day, they said. 

"There is no clear indication in the geopolitical factors. There were few attacks in West Asia Sunday, but that has not led to major escalation for now. But the continuous outflows are a pain point for the rupee," a dealer at public-sector bank said. 

After hitting a record low of 96.3875 a dollar during the day, the Indian unit settled at 96.3450 a dollar Monday, 0.4% lower than the previous close. The fall in other Asian currencies also weighed on the rupee. Asian currencies fell 0.6-1.1% against the dollar, with the Indonesian rupiah being the worst hit. 

The Indian currency opened at a record low against the dollar Monday due to high crude oil prices and a firm dollar index, dealers said. The rupee moved in a range of 21 paise during the day. "Till the crude prices are higher, the rupee will see a gap-up movement of 10 paise because of crude. Now the rupee has crossed 96.35 level, if no positive news comes, rupee will touch 96.50 (a dollar) in couple of days," a dealer at a private sector bank said. At 1530 IST, Brent crude oil prices for June delivery were $110.26 a barrel, up from $109.26 a barrel Friday, and $105.72 Thursday. Crude oil prices have risen over 51% since the war began on Feb.28. 

The dollar index also strengthened after US President Donald Trump said Iran's time was ticking and that they should hurry with the peace deal, or they will be destroyed. Meanwhile, the UAE reported drone attacks by Iran on energy infrastructure near Abu Dhabi on Sunday, which further dampened investors' risk appetite. At 1530 IST, the dollar index edged down at 99.20, down from 99.28 Friday and up from 98.87 Thursday. The dollar index rose to a six-week high of 99.40 during the day.

Banks also bought dollars on behalf of importers, who expect further depreciation of the rupee amid the continued global uncertainty, dealers said. "Importers are buying at every dip, but not aggressively, as they await few relief measures from the government to give the rupee a breather," the dealer at a private-sector bank said. 

Banks also bought dollars on behalf of foreign portfolio investors looking to exit Indian markets, dealers said. FPIs withdrew nearly $5.93 billion worth of funds from Indian markets last month. FPI outflows so far in 2026 is around $21.95 billion, which is more than double the outflows seen in entire of 2025. Sensex and Nifty closed broadly stable on Monday. 

With an end to the war in West Asia nowhere is sight, and the sustained depreciation of the rupee, market participants expect the government to come up with strong measures to mobilise dollar inflows to boost its foreign exchange reserves and support the Indian currency. "If the government releases measure soon, the rupee can reverse its direction to as much as 60-70 paise in a day," a dealer at public-sector bank said. 

FORWARDS

The one-year dollar-rupee forward premium ended over six-week high Monday as the rupee's fall to a record low against the dollar prompted banks to buy the greenback for forward delivery on behalf of importers, fearing further depreciation, dealers said. However, the forward buys were not aggressive in nature, they said. 

A few dealers said the rally in the spot market has forced banks to unwind their received positions, which pushed forwards higher. However, a rise in US Treasury yields capped the gains for the forward premiums, dealers said. US Treasury yields rose to 4.61% Friday from 4.50% Thursday. 

The one-year exact period dollar-rupee forward premium was 3.46% at 1530 IST, higher than Friday's close of 3.26%. On an absolute basis, the premium was 333.00 paise, against 313.13 paise Friday. 

OUTLOOK

On Tuesday, the rupee will continue tracking overnight movement in crude oil prices amid evolving developments related to the West Asia war, dealers said. The local unit will also take cues from movement in the dollar index, they said. 

"The rupee will only recover and market will only correct if crude reverses below $100 a barrel and outflows turn positive," a dealer at a private-sector banks said. Persistent foreign portfolio outflows may also exert pressure on the Indian unit. Dealers also expect importers to continue buying dollars, fearing further rupee depreciation, which may weigh on the Indian currency.

However, dealers expect RBI to intervene by selling dollars to curb excess volatility. The RBI is likely to keep a light touch on intervention, like it has been recently. 

Dealers now see strong technical support for the Indian currency at 96.50 per dollar. The rupee is likely to move in a range of 96.20-96.60 against the dollar Wednesday.  End 

India Rupee: World FX: Dollar gains as W Asia tension, crude oil prices rise

MUMBAI – The dollar index hit a six-week high Monday amid teetering US-Iran peace talks, with US President Donald Trump warning Tehran that it's running out of time for negotiations and the US may renew strikes if a peace deal isn't agreed to soon. The index eased a bit after hitting the six-week high.

"They (Iran) better get moving", or "there won't be anything left of them," Trump posted on Truth Social. The dollar index was at 99.16 against 99.27 Friday and 98.87 Thursday. The dollar also strengthened as investors increasingly price in a rate hike by the US Federal Reserve this year, with crude prices rising and strong US economic data pointing the economy is heated even without the full effect of the war in West Asia playing out.

At 1441 IST, the Brent crude oil prices for delivery in July traded at $110.05 per barrel, up nearly 1% from the previous day's close. The pound sterling fell against the dollar as political chaos in the UK weighed on the currency. Further, the increasing demand for the dollar due to its safe-haven status has also weakened other currencies, including the pound, which was 0.3% down against the dollar.

The yen continued to weaken against the dollar for the sixth consecutive day as high crude oil prices put pressure on the yen, with importers having to sell yen to buy dollars for the soaring energy import bill. The yen was 0.3% down against the dollar. However, crude oil prices pared some gains amid news that Iran and Oman are in talks to ensure safe transit of ships through the Strait of Hormuz.

The euro was marginally down against the dollar as uncertainty in West Asia sparked a surge in crude oil prices. The Swiss franc was down 0.1% against the dollar, while the Swedish Krona was also 0.1% down against the greenback. Bucking the trend was the Canadian dollar, which was marginally up against the dollar. (Suryash Kumar)

India Rupee: Premium at 6-wk high; importers buy fwd dlrs as spot rupee falls

MUMBAI – The one-year dollar-rupee forward premium rose for the second consecutive day to a six-week high as the rupee's fall to a record low earlier on Monday prompted banks to buy dollars on behalf of importers, who feared further weakness for the Indian currency, dealers said. 

The rupee fell to a record low of 96.3325 a dollar Monday as Brent crude oil prices continued to rise amid uncertainty over the ceasefire agreement between the US and Iran, they said. "The premium will rise further as crude prices remain elevated, putting further pressure on the BoP (balance of payments)," a dealer at a foreign bank said. The Reserve Bank of India intervened via dollar sales at around 96.20 a dollar to slow down the depreciation of the rupee, they said. 

A few dealers said the rally in the spot market has forced banks to unwind their received positions, which pushed forwards even higher. "There is only minor receiving being cut. But we have to watch this week how rupee unfolds," a dealer at a private sector bank said.

However, a rise in US Treasury yields limited gains for forward premiums, they said. The 10-year US bond yield neared a one-year high to 4.60% Friday, against 4.50% Thursday. US Treasury yields ‌spiked on rising bets of a rate hike by the US Federal Reserve this year.

The one-year exact period dollar-rupee forward premium was 3.41% at 1327 IST, up from Friday's close of 3.26%. It rose to a high of 3.48% Monday. On an absolute basis, the premium was 329.00 paise, against 313.13 paise Friday. (Divya Moolayattil)

India Rupee: Falls sharply as oil remains above $110/bbl, dollar strengthens

MUMBAI – The rupee fell further against the dollar Monday as crude oil prices remained above $110 a barrel and the dollar strengthened amid rising uncertainty around the war in West Asia, dealers said. "The rupee is mirroring oil prices. If oil goes below $100 a barrel, the rupee may get some relief. But it will be under pressure if oil stays at this level," a dealer at a foreign bank said. At 1240 IST, Brent crude July futures were at $110.88 a barrel, up from $109.26 a barrel Friday and $105.72 Thursday.  

The dollar index fell slightly to 99.20 at 1240 IST from 99.27 Friday, and 98.87 Thursday. The index neared a six-week high of 99.40 in early trade Monday. The rupee was weighed down as banks bought dollars on behalf of oil marketing companies and other importers, who feared further depreciation of the rupee, dealers said. The rupee has fallen over 1% since last week.

Domestic equity indices opened sharply lower Monday, further weighing on the rupee, dealers said. At 1242 IST, the Sensex and Nifty were down 0.2% each. Foreign portfolio investors continue to sell shares amid uncertainty over peace talks between the US and Iran after UAE and Abu Dhabi reported drone attacks by Iran on energy infrastructure. So far in May, FPIs have withdrawn $2 billion worth of funds from the Indian market. "Appreciation of the rupee is least likely this week, unless the government announces relief measures, or there is clarity around the war situation," a dealer at a public sector bank said.

However, the fall in the rupee was limited as the Reserve Bank of India intervened to slow down the depreciation of the rupee, dealers said. "The RBI is intervening where there is liquidity. It is not protecting a particular position, that is very unlikely," the dealer said. 

For the rest of the day, the rupee is seen moving between 96.15 and 96.40 against the greenback. Dealers peg immediate technical support for the rupee at 96.35 a dollar. (Divya Moolayattil)

India Rupee: Technical levels for rupee - May 18

MUMBAI – At 1115 IST, the rupee was at 96.3300 a dollar. At 0900 IST, the rupee was at 96.1650 a dollar, against the previous close of 95.9650. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages.

(Divya Moolayattil)

India Rupee:Hits record low as oil crosses $111/bbl; RBI dlr sales limit fall

India Rupee: Hits record low as oil crosses $111/bbl; RBI dlr sales limit fall

MUMBAI – The rupee continued its losing streak for the seventh consecutive day and hit a record low against the dollar as Brent crude oil prices surged above $111 a barrel due to fears of escalation in the war in West Asia after US President Donald Trump issued fresh threats to Iran, dealers said.

"For Iran, the Clock is Ticking, and they better get moving, FAST, or there won't be anything left of them," Trump warned Iran in a post on Truth Social, "TIME IS OF THE ESSENCE!"  According to media reports, a drone strike led to a fire at a nuclear energy plant in the United Arab Emirates, raising fresh concerns about escalation amid a fragile ceasefire between Iran and the US. Abu Dhabi officials said the blaze broke out at an electrical generator outside a plant Sunday. Investors flocked to safe haven assets after Trump's threats, which kept the dollar index above 99. At 0938 IST, the dollar index rose to 99.32 from 99.28 Friday and 98.87 Thursday. 

However, losses for the Indian unit were limited as state-owned banks sold dollars, likely on behalf of the Reserve Bank of India, dealers said. "The weakness in the rupee will continue unless there's some good news emerging from West Asia," a dealer at a private sector bank said. "Now RBI is unlikely to protect any levels. They are selling (dollars) to curb the volatility."

High crude oil prices also exerted pressure on the Indian currency. Brent crude oil futures for July delivery were at $111.23 a barrel at 0938 IST, higher than $109.26 a barrel Friday, and $105.72 a barrel Thursday.

Further, heavy demand for dollars by importers, especially oil importers, continued to weigh on the rupee, dealers said. "The escalating situation in West Asia has sent crude prices up and oil importers fear that crude oil prices could go up even further, which is why the demand for dollars at current levels exist," a dealer at a private sector bank said.

For the rest of the day, the rupee is seen moving in a range of 95.90-96.30 a dollar. Dealers see strong technical support for the rupee at 96.25 a dollar. (Divya Moolayattil)

India Rupee: Expected range for rupee - May 18

MUMBAI – Following are the support and resistance levels expected for the rupee Monday, as forecast by leading banks and brokerages in an Informist Poll:

India Rupee - Asia FX: Fall amid rising tension in W Asia, high crude prices

MUMBAI – Asian currencies fell against the dollar Monday as the West Asia crisis deepened, with US President Donald Trump warning Iran that it was running out of time to reach a peace deal. Trump warned Tehran that the "clock is ticking" for a peace deal, saying, "They better get moving", or "there won't be anything left of them". Rising crude oil prices also weighed on Asian currencies and Brent crude oil for delivery in July traded at $111.61 per barrel, up over 2% from the previous day's close.

The dollar index inched up as the US-10 year treasury yield rose to 4.59% Friday amid escalating tension in West Asia. The dollar index was at 99.35, against 99.27 Friday, and 99.87 Thursday.

The Indonesian rupiah was down 0.2% against the dollar. The rupiah fell as crude prices rose amid growing tension between the US and Iran. The Malaysian ringgit gave up its gain as investors' sentiment dampened amid the prolonged West Asia war. The ringgit was the worst hit and was down 0.7% against the dollar. The South Korean won fell 0.5% against the greenback. 

The Philippine peso was down 0.1% against the US dollar as high crude oil prices weighed on the economy, which mostly imports crude oil to meet its energy needs. The Chinese yuan was down 0.1% against the dollar, while the Thai Baht was marginally down against the greenback. (Suryash Kumar)

End

US$1 = INR 96.3450

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Akul Nishant Akhoury

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