Historic decline! Dollar crosses ₹96 for the first time, rupee falls into abyss; Now will it wreak havoc on your pocket?

Today has been recorded in the black pages of history for the Indian currency i.e. Rupee. The rupee has crossed the psychological level of 96 for the first time and fallen to a record low of 96.14 against the US dollar. On Wednesday itself, it saw a huge fall of 50 paise, whereas a day earlier it had closed at 95.64. This is not just a government figure, but an inflation alarm which is going to directly impact your plate and pocket.

The rupee has been under heavy pressure since the beginning of 2026. It broke the level of 90 for the first time in December 2025 and now market experts are warning that if the situation does not improve soon, the price of one dollar may reach Rs 100.

Foreign tension increased the heartbeats of Indian market

The biggest factor behind this plight of the rupee is the geopolitical crisis in the Middle East (West Asia). The increasing conflict between America, Israel and Iran has created an atmosphere of fear in the global market. The fear of stopping the supply of oil from the ‘Hormuz Route’ has forced investors to look for a safe haven, and the US dollar is currently the safest bet for investors around the world. This tremendous demand for dollars has taken the ‘Dollar Index’ to the level of 99.07. The rule is simple—the stronger the dollar in the world, the weaker Asian currencies like the rupee will be.

Crude oil: the biggest headache of the Indian economy

India buys more than 85% of its crude oil needs from abroad. In the international market, Brent crude has currently crossed the dangerous level of $ 107 per barrel. Rising oil prices mean that India will now have to spend even more dollars to buy oil. According to a Reuters survey, the production of OPEC countries is at the lowest level in the last two decades.

Saudi Aramco CEO Amin Nasser has warned that about 100 million barrels of oil is being lost every week due to the halt in exports from the Strait of Hormuz. In such a situation, it may take time till 2027 for the market to become completely stable. JP Morgan’s report also indicates that even after the opening of the route, oil prices will remain around $100 due to logistics problems.

Migration of foreign investors and turmoil in the stock market

On one hand, crude oil has increased the import bill, while on the other hand, foreign institutional investors (FIIs) are rapidly withdrawing their money from the Indian stock market. On Wednesday alone, foreign investors sold shares worth more than Rs 4,700 crore. When dollars come out of the market in large quantities, there is pressure on the country’s foreign exchange reserves and the value of the rupee automatically starts falling.

Inflation hit: What will be expensive?

Weakening of rupee directly means ‘imported inflation’. Along with petrol and diesel, things like cooking gas (LPG), plastic products, mobiles and laptops will become expensive because their payment is in dollars. Wholesale inflation is already at its highest level in three and a half years. Moreover, students who are studying abroad or those who are planning to travel abroad will now have to dig deep into their pockets to buy dollars.

Government’s strict steps and PM Modi’s appeal

In view of the worsening situation, Prime Minister Narendra Modi himself has taken command. He has appealed to the countrymen to stop wasteful expenditure and adopt economic discipline to save foreign exchange reserves. The government has also increased the tariff (import duty) on import of precious metals on Tuesday night to stop the withdrawal of dollars. However, traders believe that the rupee may see further decline in the coming days.

Historical journey of rupee against dollar