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The Indian rupee fell to a fresh record low on Thursday, depreciating 20 paise to 95.86 against the US dollar in early trade. The slide came as elevated crude oil prices and the ongoing West Asia crisis continued to pressure the domestic currency. The rupee has now weakened by more than 6% against the dollar since the West Asia conflict began, making it the worst-performing currency in Asia so far in 2026. 

Meanwhile, domestic equity markets moved in the opposite direction, with the Sensex and Nifty both gaining ground in early trade.

How Is The West Asia Crisis Pushing The Rupee Lower?

At the interbank foreign exchange market, the rupee opened at 95.74 before slipping further to a record low of 95.86, a fall of 20 paise from its previous close. On Wednesday, May 13, the currency had already hit an all-time low of 95.80, eventually settling at 95.66, near its record closing low.

CR Forex Advisors MD Amit Pabari summed up the pressure building across the economy: "From jewellery showrooms to fuel stations, every imported commodity is now carrying a heavier price tag, and the rupee is feeling the weight of it."

He also pointed to rapidly shifting geopolitical signals as a key source of instability, adding: "US President Donald Trump stated that he does not expect China's help in resolving the Iran conflict, while peace negotiations between Washington and Tehran remain on hold as both sides continue to disagree on key conditions."

In a bid to protect foreign exchange reserves, India raised import duties on gold and silver from 6% to 15%. However, traders noted that the rupee's direction will depend more on crude oil prices and the West Asia situation than on gold flows.

Brent crude was trading higher by 0.44% at $106.10 per barrel in futures trade, while the dollar index was at 98.48, down 0.04%.

What Did Trump And Xi Discuss At The Great Hall Of The People?

Adding to an already uncertain global backdrop, Chinese President Xi Jinping on Thursday welcomed US President Donald Trump at the Great Hall of the People in Beijing, describing 2026 as a "historic, landmark year" for China-US relations. The two leaders are scheduled to hold several rounds of talks on Thursday and Friday, covering areas including the war in Iran, trade, technology, and Taiwan.

Trump's visit comes as economic and geopolitical uncertainties stemming from the West Asia conflict and the resulting global energy shock continue to weigh heavily, particularly across Asia.

On the domestic equity front, the Sensex jumped 424.44 points to 75,033.42, while the Nifty climbed 141.90 points to 23,554.50 in early trade. Foreign Institutional Investors, however, sold equities worth Rs 4,703.15 crore on Wednesday, according to exchange data.