Indian rupee weakens to 95 per US dollar, down 0.56% on Monday. The crash came after US President Donald Trump rejected Iran’s response to the US peace proposal, following which crude oil prices surged rapidly. Here are 3 reasons why Rupee fell to 2026 low.
1. Oil prices surge, dollar index gains strength
Brent crude, the global oil benchmark, rose sharply by 4.17% to $105.5 per barrel in futures trade. Meanwhile, the dollar index was trading at 98.20, up 0.20%.
2. Iran-US tensions keep markets on edge
On the latest update on the Iran-US war, which has continued since February, Iran sent its response to the latest US ceasefire proposal via Pakistani mediators and wants negotiations to focus on permanently ending the war, as per a report by PTI citing Iran’s state-run media.
Trump rejected Iran’s proposal to end the months-long war as “totally unacceptable” without sharing details, even as a key Republican leader urged him to consider the “military option”.
3. Equity markets under pressure
On the domestic equity market front, the Sensex plummeted 810.35 points, or 1.05%, to 76,517.84, while the Nifty tanked 225.40 points, or 0.93%, to 23,950.75.
Foreign Institutional Investors offloaded equities worth Rs 4,110.60 crore on Friday.
Forex reserves decline
India’s forex reserves dropped by $7.794 billion to $690.693 billion during the week ended May 1, according to RBI. In the previous reporting week ended April 24, the overall reserves declined by $4.82 billion to $698.487 billion.
Rupee opens sharply lower
At the interbank foreign exchange, the rupee opened at 94.97 against the US dollar before inching up to 94.90, down a staggering 139 paise from its previous close.
On Friday, the rupee pared its losses and ended with a sharp gain of 71 paise at 93.51 against the greenback.