Why INR Breached 95 Against the USD
By Taher Yunus | BengaluruFor Indian Press Union (IPU)
Executive Summary
On March 30, 2026, the Indian Rupee breached the ₹95-per-US-Dollar mark in intra-day trading, hitting a historic low. This sharp depreciation is not a matter of chance; rather, it reflects a convergence of geopolitical tensions, elevated commodity prices, and sustained capital outflows.
Market Snapshot
INR/USD (Mar 30, 2026): ~₹95 (intra-day low)
Brent Crude: $110–$115 per barrel
FII Outflows (March 2026): ₹1.13 lakh crore
Rupee Depreciation (2014–2026): ~57.7%
What’s Driving the Fall?
1. West Asia Crisis and Rising Risk Aversion
The ongoing conflict involving Iran has entered its second month, unsettling global financial markets. In times of uncertainty, investors typically adopt a risk-averse approach, shifting capital away from emerging markets such as India toward perceived safe havens like the US Dollar.
2. Crude Oil Surge and Dollar Pressure
India imports over 80% of its crude oil requirements. With Brent crude trading above $110–$115 per barrel, the country must spend significantly more dollars to secure energy supplies. This heightened demand for USD places additional pressure on the Rupee, contributing to its depreciation.
3. Persistent FII Outflows
Foreign Institutional Investors (FIIs) have withdrawn over ₹1.13 lakh crore from Indian markets in March alone. As these investors liquidate holdings, Rupees are converted into Dollars for repatriation, further increasing demand for USD and weakening the domestic currency.
Impact on Everyday Life
Rising Inflationary Pressures
A weaker Rupee makes imports more expensive, leading to higher prices across essential goods, including:
Petrol and diesel
Edible oils
Imported electronics
Education and Travel Costs
Students studying abroad and families planning international travel are likely to face increased expenses. Costs could rise by approximately 5–10% compared to the previous year.
Sectoral Impact: Winners and Losers
Beneficiaries
Information Technology (IT): Higher Rupee realization from Dollar-denominated revenues
Pharmaceutical Exports: Improved margins due to favorable exchange rates
Affected Sectors
Aviation (due to higher fuel costs)
Manufacturing (dependent on imported raw materials)
Consumer electronics
Long-Term Perspective
Between 2014 and 2026, the Indian Rupee has depreciated by approximately 57.7%. This trend highlights structural challenges, including import dependence and sensitivity to global capital flows.
Can the Rupee Return to ₹60–₹68?
A key question emerges: Can the Rupee realistically return to the ₹60–₹68 range against the US Dollar?
Conditions Required
Strong and sustained capital inflows
Controlled inflation
Reduced dependence on imported energy
A stable global geopolitical environment
Reality Check
Given current global dynamics and India’s economic structure, such a reversal appears unlikely in the near term. Achieving this would require deep structural reforms and consistent macroeconomic stability over time.
Conclusion
The Rupee’s decline is not an isolated event; it reflects broader global and domestic economic forces at play. While export-oriented sectors may benefit, the wider impact—particularly on inflation and the cost of living—will be felt across households and industries.
The trajectory of the Rupee will ultimately depend on policy responses, global developments, and India’s ability to strengthen its economic fundamentals.
