Despite increasing the duty on gold and silver, the earthquake in the currency market did not stop, the rupee reached a record low of 95.75 against the dollar.

Rupee vs Dollar : Modi Government increased the custom duty on gold and silver from 6 percent to 15 percent. Despite this, the decline in the Indian rupee does not seem to be stopping. On Wednesday, the rupee weakened 0.1 percent against the US dollar and reached a new all-time low of 95.7450. On Tuesday too, the rupee fell 40 paise to close at an all-time low of 95.68, while in intra-day trading it slipped to 95.7375.

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Rupee among the worst performing currencies among Asian currencies

So far in the year 2026, the rupee has weakened by more than 6.5 percent against the dollar and is among the worst performing currencies among Asian currencies. The government has recently increased the import duty on gold and silver from 6 percent to 15 percent. This step has been taken in view of the increase in crude oil and import costs due to increasing tensions in West Asia, so that foreign exchange can be saved and trade deficit can be controlled. The rupee opened at 95.52 per dollar in the Interbank Foreign Exchange Market, which is 16 paise stronger than the previous closing price. However, in the second half of the day the pressure on the rupee increased again and a sharp decline was seen in it.

Prime Minister’s appeal and government’s strict steps

In view of the continuous decline in the rupee, Prime Minister Narendra Modi had appealed to the countrymen last weekend to save foreign exchange reserves. He had asked people to reduce wasteful expenditure and maintain economic discipline in the interest of the country. In this series, the government had increased tariffs on the import of precious metals on Tuesday night so that the speed of outflow of dollars could be reduced. Traders believe that further decline in rupee may be seen in the coming time.

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How is the value of currency determined?

If the value of any currency decreases against the dollar, it is called currency depreciation. Every country has foreign currency reserves, through which international transactions take place. Its increase and decrease affects the currency. If there are enough dollars in India’s foreign reserves, the rupee will remain stable. If the dollar decreases, the rupee will weaken; if it increases, it will become strong.

Main reasons for fall in rupee

Geopolitical Tension: Tension has increased in the Gulf countries after US President Donald Trump termed the ceasefire with Iran as weak. Due to fear of war or conflict, investors are withdrawing their money from emerging markets (like India) and running towards safe investments.

Rise in crude oil prices: There is a fear of supply disruption in the global market due to the Iran crisis. For this reason, the prices of Brent crude oil have crossed $ 105 per barrel. India imports about 80% of its oil needs, which increases demand for the dollar when oil becomes expensive and the rupee weakens.

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Increasing trade deficit: When crude oil prices increase, India’s import bill also increases. This is likely to increase the country’s ‘Current Account Deficit’ (CAD), which directly reduces the value of the rupee.

Dollar strength: In an environment of global uncertainty, the US dollar is considered the safest asset i.e. safe haven. After Trump’s tough stance, the demand for dollars has increased in markets around the world, due to which other currencies including the rupee are under pressure.

Withdrawal of foreign investors: As global risks increase, foreign portfolio investors withdraw their investments from the Indian stock market and move them back into dollars. The value of rupee falls due to dollar leaving the market.

Dollar expensive, danger of rising inflation in India

The Middle East conflict is being considered as the most serious energy crisis in decades, which is directly impacting India.

Oil Prices: India’s import bill has increased due to costlier crude oil.

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Essential goods costlier: Supply of LPG, plastic and other petrochemical products affected.

Fear of inflation: Due to the dollar becoming expensive, petrol, diesel and imported goods will become expensive, due to which retail inflation may increase.

Studying and traveling abroad is expensive: Now you will have to spend more money on going abroad or buying dollars for studies.

Electronics expensive: Mobiles, laptops and imported parts can be expensive because payments are in dollars.