The rupee fell 2 paise to close at an all-time low of 95.25 (provisional) against the U.S. dollar on Tuesday (May 5, 2026), as investors are retreating from riskier assets amid renewed clashes in the Gulf and targeting of UAE infrastructure, which have reignited supply chain fears.

Forex traders said Brent oil, hovering near $110 per barrel, is maintaining pressure on oil-importing economies like India. Moreover, factors such as unabated foreign capital outflows amid rising geopolitical uncertainties dented investor sentiments further.

At the interbank foreign exchange market, the rupee opened at 95.30 against the U.S. dollar, then lost ground and touched an all-time low of 95.44 in intra-day trade. The rupee finally settled for the day at a fresh record low of 95.25 (provisional), registering a fall of 2 paise over its previous close.

On Monday (May 4), the rupee fell 39 paise to close at an all-time low of 95.23 against the U.S. dollar.

“We expect the rupee to trade with a negative bias on rising global crude oil prices as the Strait of Hormuz continues to remain closed. Dollar demand from importers and ongoing geopolitical tensions between the U.S. and Iran may also pressure the rupee.

“However, RBI intervention may support the rupee at lower levels. USDINR spot price is expected to trade in a range of 95.10 to 95.55,” said Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 98.47, up 0.10%.

Brent crude, the global oil benchmark, was trading lower by 1.57% at $112.64 per barrel in futures trade.

On the domestic equity market front, Sensex declined 251.61 points to settle at 77,017.79, while the Nifty fell 86.50 points to 24,032.80.

Foreign Institutional Investors purchased equities worth ₹2,835.62 crore on Monday (May 4), according to exchange data.