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22 May 2026 12 views

Indian Rupee Depreciation Crisis

theIAShub
theIAShub
22 May, 2026
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Indian Rupee Depreciation Crisis
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Record-breaking currency fall driven by geopolitical tensions and capital flight — critical for UPSC Economy & Current Affairs.

Why in News

The Indian rupee hit an all-time closing low of ₹96.86 against the U.S. dollar on 22 May 2026, triggered by escalating West Asia conflicts, foreign capital outflows, and surging Brent crude oil prices nearing $110 per barrel.

Key Facts

  • ₹96.95/$ — All-time intraday low touched before closing at ₹96.86/$.
  • 5% year-on-year depreciation — Compared to May baseline of ₹84.99/$.
  • 5% slide — Depreciation in current calendar year alone.
  • $696.99 billion — India's foreign exchange reserves (down from peak $728.5 billion).
  • $20.6 billion — Foreign Institutional Investor (FII) equity outflow. (UPSC Mains Usage: Links to GS3 topics on capital account management and external sector vulnerability)
  • 15% import duty — Imposed on gold and silver to curb non-essential dollar outflows.
  • Currency depreciation — Deliberate or market-driven decrease in currency value relative to foreign benchmark in floating exchange rate system.
  • RBI interventions — Spot market dollar sales, forward market operations, and moral suasion to manage rupee volatility.

Quick Revision Box

Term

Detail

Record Closing Low

₹96.86/$ on 22 May 2026

Year-on-Year Fall

11.5% from ₹84.99/$ baseline

FII Outflow

$20.6 billion equity withdrawal

Forex Reserves

$696.99 billion (RBI intervention depleted)

Crude Oil Price

Approaching $110/barrel (Brent)

Import Duty Hike

15% on gold and silver



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