Indian Rupee Hits Record Low Amid Rising Oil Prices

May 12, 2026

64 min

May 12, 2026 16:31

Indian rupee hits new record below 26 as oil surge boosts UAE remittance value

## Rupee Decline and UAE Remittances

The Indian rupee has reached a new low against the US dollar, significantly benefiting Indian expatriates in the UAE. As of 7pm UAE time, the exchange rate was Rs26.08 per dirham, marking a favorable opportunity for remittances.

## Impact of Oil Prices

The decline in the rupee's value is largely attributed to the surge in crude oil prices, which have increased India's import costs. Brent crude rose 3.4% to $107.72 per barrel, while West Texas Intermediate saw a nearly 4% increase. These price hikes are linked to disruptions in the Strait of Hormuz, a crucial oil shipping route.

## Economic Concerns

India's reliance on imported oil makes it vulnerable to rising energy costs, which in turn heighten demand for dollars and widen the trade deficit. Foreign investment outflows have also contributed to the rupee's weakness, with nearly $20 billion withdrawn from Indian equities in early 2026.

## Future Outlook

Economists predict that India's balance-of-payments deficit could reach up to $50 billion this fiscal year. Despite foreign exchange reserves standing at $703 billion, the Reserve Bank of India's capacity for intervention is limited. Analysts expect the rupee to remain under pressure in the coming months, with oil prices projected to average $100 per barrel in the fourth quarter.

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