The rupee tanked 82 paise to settle at its record low of 95.31 (provisional) against the US dollar on Monday (May 11, 2026) after U.S. President Donald Trump rejected Iran’s response to the West Asia peace proposal, following which crude oil prices surged rapidly.

Prime Minister Narendra Modi urging citizens to avoid buying gold and embrace austerity measures further dented market sentiments.

A strengthening U.S. dollar and steep foreign capital outflows further pressured the local unit, according to forex traders.

At the interbank foreign exchange, the rupee opened at 94.97 and traded in the range of 94.87-95.34. It eventually settled at its record low of 95.31 (provisional), down 82 paise from its previous close.

On Friday (May 8, 2026), the rupee had closed at 94.49 against the US dollar.

Iran, meanwhile, has sent its response to the latest US ceasefire proposal via Pakistani mediators and wants negotiations to focus on permanently ending the war, Iran’s state-run media said on Sunday.

Mr. Trump rejected Iran’s proposal to end the months-long war as “totally unacceptable” without sharing details even as a key Republican leader urged him to consider the “military option”.

Mr. Modi on Sunday (May 10, 2026) appealed to people of the country for judicious use of fuel, postponement of gold purchases and foreign travel, among other measures, amid the ongoing conflict in West Asia.

“PM Modi asked for a slowdown on buying petrol, gold, foreign trips, etc., to save foreign exchange to keep fiscal deficit lower. The implication of these steps in the short term would be a slowdown in growth,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

“While Trump did not agree to Iran’s reply on his peace proposals, it took oil to $105 levels and dollar index to above 98 levels keeping them well bid… The rupee is expected to remain between 94.75 and 95.50 on Tuesday,” he said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 98.02, up 0.13%.

Brent crude, the global oil benchmark, rose 2.52% to $103.8 per barrel in futures trade.

On the domestic equity market front, the Sensex crashed 1,312.91 points, or 1.70%, to 76,015.28, while the Nifty plummeted 360.30 points, or 1.49%, to 23,815.85.

Foreign Institutional Investors offloaded equities worth ₹4,110.60 crore on Friday (May 8, 2026), according to exchange data.

India’s forex reserves dropped by $7.794 billion to $690.693 billion during the week ended May 1, the RBI said on Friday (May 8, 2026). In the previous reporting week ended April 24, the overall reserves declined by $4.82 billion to $698.487 billion.