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Informist, Wednesday, May 20, 2026

By Divya Moolayattil

MUMBAI – The rupee fell sharply against the dollar and ended at a record low for the eighth consecutive day Wednesday amid higher crude oil prices and continuous exit of foreign investors from the Indian market, dealers said. The Indian unit was also weighed down by persistent dollar purchases by oil marketing companies, they said.

However, the rupee's fall was limited as the Reserve Bank of India intervened to support the currency, they said. "The RBI was selling (dollars) around the 96.95 (a dollar) level early in the day. That is why the rupee was rangebound. Later, the demand for dollars came in heavily," a dealer at a private sector bank said.

After falling to a record low of 96.9600 a dollar, the Indian unit settled at 96.8200 a dollar on Wednesday, down 0.3% from its previous close. The rupee has fallen for nine consecutive days and is down 2.6% against the dollar during the period. The Indian currency has fallen 6.5% against the dollar since the war in West Asia broke out on Feb. 28.

The Indian unit opened on a weaker note, falling 33 paise from its previous close, as risk appetite among investors was dampened amid no sign of near-term end to the war in the West Asia. US President Donald Trump said Washington will attack Iran in the next two-three days if it does not come up with an acceptable deal. While Tehran warned that a return to war would feature many more surprises.

Meanwhile, the US continued to block Iranian ports and coastal routes and Iran kept the Strait of Hormuz closed for trade, which kept crude oil prices higher, weighing heavily on the rupee. At 1530 IST, Brent crude oil prices for June delivery were at to $109.32 a barrel, down from $111.28 a barrel Tuesday. Prices hit a high of $111.49 earlier Wednesday. 

Even as the Indian currency fell, most Asian currencies were broadly steady or traded higher in the European session, with the Indonesian rupiah gaining the most.   

Banks persistently bought dollars on behalf of importers, fearing further depreciation of the rupee and a rise in crude oil prices, dealers said. "The importers were panic buying (for dollars) worrying if the rupee would fall to the crucial mark of 97 (a dollar)" a dealer at a private sector bank said.

Strong foreign portfolio outflows from domestic markets also weighed on the Indian unit, dealers said. So far in May, FPIs have net sold Indian assets worth $1.29 billion and $21.47 billion so far in 2026, which is more than double their net sales for the whole of 2025.

The dollar index rose Wednesday on the back of safe-haven demand due to uncertainty around peace talks between the US and Iran, weighing on the rupee, dealers said. At 1530 IST, the dollar index was at 99.43 against 99.31 Tuesday and 98.95 Monday. 

Meanwhile, market participants await core eight industries data due later in the day and Flash PMI, which is due Thursday. 

FORWARDS 

One-year dollar-rupee forward premium stayed at a six-week high for the second consecutive day Wednesday as banks persistently bought forward dollars on behalf of importers, noting the sharp fall in the rupee in the spot market, dealers said.

The RBI has been intervening to slow the rupee's depreciation. "If RBI was not in market, rupee would free fall. Now all eyes are on the RBI to keep rupee's fall in check," a dealer at a public-sector bank said. 

At 1530 IST, the one-year exact period dollar-rupee forward premium was 3.51%, up from 3.50% at close Tuesday. On an absolute basis, the premium was 342.00 paise, up from 337.75 paise Tuesday.

OUTLOOK 

On Thursday, the rupee will track movement in crude oil prices and the developments in peace talks between the US and Iran. "Crude is the only thing driving rupee now. We are an import-dependent nation, there is no way we can escape rupee depreciation till crude is high," a dealer at a private-sector bank said. 

Dealers expect importers to continue buying dollars, fearing further rupee depreciation, which may weigh on the Indian currency. Persistent foreign portfolio outflows may also add pressure on the Indian unit. 

However, most market participants expect the RBI to continue intervening by selling dollars once the rupee inches closer to the psychologically crucial 97-per-dollar level. "Every day there is a gap up of 15-20 paise because of the global factor. There is decent chance that the rupee may cross 97 level, but now everything depends on the RBI's intervention," a dealer at a state-owned bank said. 

Dealers see technical support for the Indian currency at 97.00 a dollar. The rupee is likely to move in a range of 96.70-97.10 against the dollar Thursday.

India Rupee - World FX: Yen rises against dollar on strong Japan GDP data

MUMBAI – The Japanese yen was up against the dollar due to strong GDP data from Japan for Jan-Mar and fears of intervention by Bank of Japan to support the currency. The Japanese economy grew at an annualised 2.1% in the first quarter of 2026, higher than the estimate of 1.7%, driven by solid exports and consumption. The net external demand added 30 basis points to growth while private consumption and capital expenditure both grew 0.3% on quarter. However, high energy prices due to the war in West Asia may slow the growth momentum in the second quarter.

The yen was 0.2% up against the dollar. The dollar index was at 99.44, against 99.31 Tuesday and 98.95 Monday. The dollar index inched up as investors expect higher interest rates for longer, and see the Federal Reserve raising interest rates at least once this year. 

The pound sterling was marginally lower as inflation for April came in at 2.8%, down from 3.3% in the 12 months to March, below market expectations of 3.0%. The core consumer price index, which the Bank of England tracks closely, fell to 2.5% in April from 2.6% in March and against expected 2.6%. Dampened risk sentiment due to risk of flare-up between the US and Iran and high energy prices is also weighing on the pound.

The euro was slightly down against the dollar owing to broader risk aversion in the market and increasing demand for dollars due to its safe-haven status. The Swiss franc was 0.24% lower against the dollar, while the Canadian dollar was marginally down. (Suryash Kumar)

India Rupee: Premium up as importers buy dlrs as spot rupee nears 97/$

MUMBAI - Dollar-rupee forward premiums rose across all tenures Wednesday as the rupee fell sharply, nearing the psychologically-crucial 97-per-dollar mark, which prompted banks to buy dollars for forward delivery on behalf of oil marketing companies and other importers, who fear a further fall of the local currency, dealers said. "The rupee was expected to cross 97 level, that is why importers were panic buying (forward dollars), but RBI protected rupee from falling more," a dealer at a private sector bank said. 

State-owned banks bought dollars, likely for the Reserve Bank of India, limiting the sharp depreciation of the rupee, dealers said. The rupee fell to an all-time low of 96.9600 a dollar in early trade Wednesday. One-year dollar-rupee forward premium stayed at a six-week high for the second consecutive day at 349.55 paise Wednesday. "The market is under pressure, there is no positive news so far, and oil is higher. All these factors are putting pressure on the rupee," the dealer said. Brent crude oil prices have risen over 50% since the war began on Feb. 28. 

A slight fall in US Treasury yields also supported gains in forward premiums, they said. At 1429 IST, the 10-year US bond yield fell to 4.65% from 4.66% Tuesday. 

At 1429 IST, the one-year exact period dollar-rupee forward premium was 3.51%, higher than Tuesday's close of 3.49%. On an absolute basis, the premium was 341.80 paise, against 337.75 paise Tuesday. (Divya Moolayattil)

India Rupee:Cuts some losses on RBI's dlr sales; oil importers' demand weighs

MUMBAI – The rupee erased some losses as state-owned banks sold dollars, likely on behalf of Reserve Bank of India, which offset the impact of banks' dollar purchases on behalf of importers, dealers said. The Indian unit fell sharply to a record low of 96.9600 a dollar in early trade Wednesday. 

The RBI likely sold dollars around 96.95 to prevent the Indian unit from hitting the psychologically crucial 97-per-dollar mark, dealers said. The Indian currency had crossed 96.00 a dollar for the first time on May 15. The rupee has fallen for nine consecutive days, and is down 2.6% against the dollar in this period.

Importers have been actively buying dollars since the onset of the West Asia war, fearing further depreciation of the rupee, which exerted pressure on the Indian unit, dealers said. "There is huge dollar demand today. Oilers are buying, globally also dollar is strengthening. I am expecting the rupee to touch 97.00 (a dollar) today (Wednesday)," a dealer at a private sector bank said. "The market is expecting few relief measures to come soon, such as FCNR benefits, buy-sell swaps or tax measures, until then buying (dollar) will continue." 

The uncertainty in the West Asia war has kept the market on edge, dealers said. US President Donald Trump warned that Washington could carry out new strikes on Iran within days if peace talks break down, while Tehran said it would retaliate by opening "new fronts" against the US. India's import bill will be higher amid rising oil prices as war has kept the Strait of Hormuz closed for nearly three months. At 1158 IST, Brent crude prices for July delivery were at $110.63 a barrel, slightly down from $111.28 a barrel Tuesday and $112.1 Monday. Crude oil prices have risen over 50% since the war began.    

The rise in the dollar index also continued to exert pressure on the Indian unit as investors flocked to safe haven assets amid rising uncertainties. At 1158 IST, the dollar index rose to 99.33 from 99.31 Tuesday and 98.95 Monday. Sustained foreign investor outflows continue to be a drag on the Indian unit, dealers said. 

For the rest of the day, the rupee is seen moving between 96.50 and 97.10 against the greenback. Dealers peg immediate technical support for the rupee at 96.96 a dollar. (Divya Moolayattil)

India Rupee: Technical levels for rupee - May 20

MUMBAI – At 1052 IST, the rupee was at 96.7800 a dollar. At 0900 IST, the rupee was at 96.8600 a dollar, against the previous close of 96.5325. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages.

(Divya Moolayattil)

India Rupee: At record low as oil high, risk appetite hit on W Asia tensions

MUMBAI – The rupee fell to a record low against the dollar in early trade Wednesday as recent threats by the US to resume attacks on Iran hit risk appetite among investors and kept crude oil prices elevated, dealers said. The Indian unit fell to a record low of 96.9600 a dollar Wednesday. "Right now, the only thing that matters is geopolitical tensions. Market is sentimental, bidders are cautious, because no one knows what will happen in the war," a dealer at a private sector bank said.  

However, dealers speculate the Reserve Bank of India stepped in to sell dollars to prevent the Indian unit from falling past the psychologically crucial 97-per-dollar mark. "All eyes are on the RBI to see if it will come in aggressively. Minor correction to 96.30 expected," said a dealer at another private sector bank. 

The West Asia war, which is nearing its third month, is showing no signs of easing. US President Donald Trump Tuesday said the US would attack Iran in two or three days if Iran does not submit an acceptable deal. Iran also warned a return to war would feature many more surprises and open new fronts against the US. With the Strait of Hormuz, a key waterway that carries one third of global oil, remaining shut, crude oil prices stay elevated. At 0905 IST, Brent crude oil prices for July delivery were $111.36 a barrel, slightly higher than $111.28 Tuesday and $112.1 Monday. 

Persistent foreign investor outflow continues to be a big problem for the rupee. FPIs have pulled out $1.29 billion from the Indian market so far in May. The rising dollar index also weighed on the Indian unit, as investors shift to safe-haven assets amid no signs of an end to the war in West Asia in the near term.

For the rest of the day, the rupee is seen moving between 96.50 and 97.00 against the greenback. Dealers peg immediate technical support for the rupee at 96.95 a dollar. (Divya Moolayattil)

India Rupee - Asia FX: Fall amid rise in US bond yields, tensions in W Asia

MUMBAI – Asian currencies were down as the US dollar index rose on Wednesday as rising US bond yields due to high inflation levels and US President Donald Trump's threat to Iran to agree to a deal dampened risk sentiment of investors. In his latest round of threats, Trump said Iran had "two to three days" to make a deal and said he had been an hour away from ordering an attack before postponing it.

The US dollar index was at 99.37 Wednesday, against 99.31 Tuesday and 98.95 Monday. The 10-year US treasury yield rose to 4.687%, its highest level since January 2025, while the 30-year Treasury yield rose to 5.197%, a level not seen in nearly two decades.

The Indonesian rupiah fell 0.22% against the dollar ahead of the monetary policy meeting, which concludes Thursday. Market participants widely expect the central bank to hike the benchmark interest rate by at least 25 basis points to 6.25%, while some economists bet on a more aggressive 50-basis-point hike to support the currency, which has been weakened by rising US yields and higher crude prices.

The Philippine peso was marginally down against the dollar after reaching a record low earlier this week. High crude oil prices continue to put downward pressure on the currency. The South Korean won was marginally up against the dollar, although a hawkish federal stance and high crude prices continue to limit any gains for the currency. The won was up 0.2% against the dollar.

The Malaysian ringgit was marginally down against the dollar, with strong fundamentals of the economy due to it being a hydrocarbon exporter preventing any sharp fall in the ringgit against the dollar. The Thai baht was marginally up against the dollar, and the Chinese yuan was also marginally up against the greenback. (Suryash Kumar)

India Rupee: Expected range for rupee - May 20

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

(Divya Moolayattil and Suryash Kumar)

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

Edited by Akul Nishant Akhoury

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