Rupee sinks to a new low again, opens 33 paise lower at 96.86 against dollar

May 20, 2026

New Delhi: The rupee opened 33 paise lower on May 20 to a sink to a record low yet again as a surge in global bond yields, along with consistently higher Brent crude prices, dampened the sentiment for the currency.

The rupee was trading at 96.86 against the dollar after ending the previous session at 96.53, which too was a new low for the currency. In the last seven sessions, the currency has plunged to record lows.

Rupee Worst-Performing Emerging Asian Currency This Year

The rupee, which has fallen more than 7 percent since the start of the year, is the worst-performing emerging Asian currency. This week alone the rupee is down 0.6 percent.

“From a technical perspective, the Rs 97 zone may offer some near-term resistance and trigger temporary defence in USDINR. However, with geopolitical tensions still elevated and no meaningful signs of de-escalation visible yet, that level is eventually expected to give way,” Amit Pabari, the managing director at CR Forex Advisors, said.

Brent crude prices stayed near $111 a barrel. United States Vice President JD Vance has said that while there has been some progress in the talks between the US and Iran, both sides have been reluctant to arrive at a definitive deal.

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The rupee has fallen 5.7 percent since the beginning of the Iran war.

A surge in US treasury yields amid a broad selloff in developed market bonds is amplifying pressure on the rupee, already under strain from oil prices that are distorting daily dollar demand and weighing on capital flows.

The 10-year US yield has jumped over 20 basis points in four days, while the 30-year yield has hit its highest since 2007, pushing up expectations of Fed ‌rate ⁠hikes this year.

Rising US Treasury Yields Fuel Rate Hike Concerns

The US 10-year treasury yield moved above 4.5 percent, while the 30-year yield crossed 5.1 percent, a signal that investors started pricing in a more stubborn inflation outlook in the US.

The CME’s Fedwatch tool is now showing a 47 percent probability of an interest rate hike by December, as compared to 14 percent shown last week.

“The rupee, having largely adjusted ⁠to the prospect of persistently high oil prices, now faces a repricing due to the sizeable shift in US rates,” Reuters quoted a currency trader at a bank as saying.