RUPEE AT 96: INDIA’S CURRENCY CRISIS EXPLAINED

Added: 2026-05-25

[00:00:06]India's currency has fallen to its weakest ever level against the US dollar.

[00:00:11]The rupee crossed $96 [music] for the first time in history, raising concerns around inflation, [music] fuel prices, and imports.

[00:00:42]The biggest [music] trigger is the ongoing West Asia conflict and rising crude oil prices.

[00:00:48]India imports most of its crude oil needs, so higher oil prices mean India needs more dollars to pay import bills.

[00:00:55]That pushes the rupee lower.

[00:01:20]At the same time, the US dollar itself is strengthening globally.

[00:01:25]Strong US economic data and expectations of higher interest [music] rates are attracting money into dollar assets.

[00:01:32]That is putting extra pressure on emerging market currencies [music] like the rupee.

[00:01:55]Foreign investor flows are also becoming volatile.

[00:01:58]Forex traders say global uncertainty and weaker capital inflows are adding pressure on the rupee.

[00:02:05]And also, of course, we've not been able to continue to attract foreign direct investment. Foreign portfolio investment is flowing out. So, we have a polycrisis, a multi-crisis, which is the reason why the rupee has been falling against the dollar. When the rupee falls against the dollar, inevitably, you'll have a situation where the RBI steps in to try and defend the the rupee's value against the dollar.

[00:02:37]But, that had gone on for a long time, and now the RBI has stopped doing that.

[00:02:42]So, what has happened in the last 3 months is that the rupee has gone from under 90 rupees to about 95 plus.

[00:02:56]The Reserve Bank of India is trying [music] to slow the fall.

[00:03:00]Market reports suggest RBI likely sold dollars [music] after the rupee crossed the 96 mark. The intervention helped the currency recover slightly from intraday lows.

[00:03:11]>> [music] >> A weaker rupee can make everyday [music] life more expensive. Fuel, electronics, and imported goods may cost more [music] if the currency remains weak. And if inflation rises further, loan EMIs could also stay elevated.

[00:04:02]>> Markets are now closely watching crude oil prices, [music] global tensions, and RBI action.

[00:04:08]If oil prices remain high and the dollar stays [music] strong, pressure on the rupee could continue in the weeks ahead.

[00:04:25]>> [music]