Rupee Recovers From Record Low To Open Higher At Rs 96.36 Per US Dollar On RBI Intervention

INR Vs USD Rate Today: The domestic currency recovered 41 paise from its all-time closing low to 96.45 against US dollar in early trade on Thursday, May 21, after US President Donald Trump indicated that negotiations with Iran were entering the final stages. According to Bloomberg, forex traders said the Reserve Bank of India (RBI) sold US dollars in offshore markets to support the domestic unit amid ongoing volatility and pressure on emerging market currencies. Investors are still gauging the geopolitical risk and oil price sensitivity in the background with any flare-up in US-Iran tension or spike in crude price.

At the interbank foreign exchange market, the rupee opened at 96.25 against the US dollar, then touched 96.45 in early trade, up 41 paise from its all-time lifetime low of 96.86 against the US dollar on Wednesday. The rupee hit a record low of 96.95 and later closed at 96.86 per US dollar on Wednesday which was also a new closing low as demand for US dollars continued with dollar index higher and crude oil prices remaining on the higher side near to $110 oer barrel during the session.

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"From a technical perspective, the 97.00 zone is expected to act as an immediate resistance area for USDINR, while support may emerge around the 95.50-95.80 zone," said Amit Pabari, MD, CR Forex Advisors. Pabari further added that as long as geopolitical tensions remain elevated, the broader pressure on the rupee is likely to continue. RBI measures and liquidity support may help provide temporary relief and contain volatility in the near term, he added. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 99.18, up 0.09% during the session.

Brent crude, the global oil benchmark, was trading up 0.71% at $105.77 per barrel in futures trade. However, crude oil eased by 8% in the last session as Trump hinted at positive discussions with Iran to end the war. On the domestic equity market front, Sensex climbed 327.74 points to 75,646.13 in early trade, while the Nifty was up 111.75 points to 23,772.05. Foreign Institutional Investors offloaded equities worth Rs 1,597.35 crore on a net basis on Wednesday, according to exchange data.

INR Vs USD Rate Today: Rupee opened higher against the US dollar on Thursday
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US-Iran conflict

As per US media report, US President Donald Trump and Israel's Prime Minister Benjamin Netanyahu had a tense phone call over the future course of the war on Iran as Washington appeared to be in favour of a deal instead of the resumption of strikes. After the Tuesday phone call with Trump, Netanyahu's "hair was on fire", US media outlet Axios reported on Wednesday, adding that the Israeli Prime Minister was keen on the resumption of strikes to further degrade Iran's military capabilities and weaken the regime by destroying its critical infrastructure. Trump on Sunday said he had put-off strikes on Iran, planned for Tuesday, following a request from Arab nations including Qatar and the UAE.

Rupee Vs Dollar Outlook

Following Operation Epic Fury on Feb 28, global energy prices surged and lifted USD/INR into a 92-95 range in March-April. 
Although Brent did not hit new highs in May, USD/INR rose above 95. ''We have lifted our USD/INR forecasts into a 95-100 range for the rest of 2026. Our previous expectation for a 90-95 range  assumed a short Iran conflict ending the Strait of Hormuz chokepoint and lowering oil prices, paving the way for two Fed rate  cuts in 2H 2026,'' said analysts at DBS Bank.

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USD/INR's rise was driven by additional pressure from markets reversing Fed expectations from interest rate cuts to a hike in late 2026, due to fears of a prolonged Iran conflict. ''The rapid, short-term surge of USD/INR appears unsustainable, especially as its year-on-year growth rate matches post pandemic peaks that historically signal an impending correction or a significant stabilization in momentum,'' said DBS Bank. Since the Global Financial Crisis, USD/INR exchange rate has consistently breached major ten-rupee thresholds every few years. ''USD/INR should stabilize within a 90-100 range over the coming years provided the Fed does not initiate another aggressive rate hike cycle,'' added analysts at DBS.

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