The continuous depreciation of the Indian rupee against the US dollar in the global market has become a major concern in the financial world. The sharp increase in international crude oil prices and the geopolitical tensions in the Middle East are directly affecting the Indian rupee. In this sequence, the Indian rupee fell by another 18 paise against the US dollar to a new record low of 96.38 in early trade on Tuesday. This continuous fall in the rupee has also put a lot of pressure on the stock market and investor sentiment.
The Indian rupee is continuously weakening:
The Indian rupee has been continuously weakening for the last few months. Especially since the Iran war situation began in late February, the rupee has lost more than 5% of its value. Looking at the data of the last week alone, it has recorded a decline of 2.2%. The rupee opened at 96.19 in early trade on Monday and touched a low of 96.39 by the time the market closed. Earlier, on Friday last week, the Indian rupee crossed the 96 mark against the dollar for the first time and closed at 95.81.
Is the rumor of the rupee weakening against the Pakistani rupee true?
Recently, there has been a lot of talk on social media and various financial forums that the Indian rupee has weakened not only against the US dollar but also against the currency of its neighboring country Pakistan (PKR). But if we look at the latest economic data of the last 10 years, this claim is proven to be completely baseless and false. From a long-term perspective, the position of the Indian rupee against the Pakistani rupee has been quite strong. In the last decade, Pakistan’s continuous political instability, dwindling foreign exchange reserves and skyrocketing inflation have led to a massive depreciation of the currency there. On the other hand, due to the rapid growth of the Indian economy, the value of 1 Indian rupee reached about 3.36 Pakistani rupees by 2023-24. That is, the value of the Indian rupee has almost doubled compared to the Pakistani currency in the last 10 years.
So why the talk of depreciation recently?
Although India has been strong in the long term, looking at the short-term data of the last 1 to 1.5 years, there has been a slight change in the situation, which is creating rumors in the market. Where 1 Indian rupee was worth 3.34 Pakistani rupees in mid-2024, it has decreased to about 2.89 Pakistani rupees by May 2026. That is, the Indian rupee has depreciated by about 12% against the Pakistani rupee between May 2025 and May 2026.
The main reasons behind this recent change are:
IMF Bailout Package: After receiving a bailout package from the International Monetary Fund (IMF) and adopting stringent financial reforms, Pakistan has made initial efforts to stabilize its economy, which has led to a slight improvement in its currency. The excessive strength of the dollar in the global market has put severe pressure on other rival currencies, including the Indian rupee.
Has the Indian rupee become the weakest currency in Asia?
According to the latest economic report published till May 2026, the performance of the Indian rupee compared to other Asian countries has been worrying. The ‘Global Financial Report’ has shown that the Indian rupee has proven to be the worst performing currency among Asian currencies in the years 2025 and 2026. The Indian rupee has weakened by about 6% to 9% against their currencies due to the strong monetary policies of countries like China, Malaysia and Singapore. However, the value of the Indian rupee has remained almost stable against the Indonesian rupiah. The main reasons for the continuous depreciation of the currency and the future state of the market According to Forex (foreign exchange) traders and economists, there are two main reasons behind the depreciation of the currency:
- Geopolitical tensions: The growing tension between the US and Iran is destabilizing the global market.
- Increase in import costs: India’s import costs have increased significantly due to high crude oil prices. As a result, a large amount of dollars is flowing out of the country. Along with this, foreign portfolio investors (FPIs) are also continuously withdrawing capital, which is increasing pressure on the currency.
It is estimated that the USD-INR (dollar-rupee) exchange rate can trade between 96 and 96.60 in the coming days. If the Reserve Bank of India (RBI) intervenes in the market and imposes some restrictions on gold and silver imports, the rupee may find support at lower levels as it recovers. However, despite the weakness in the rupee, the Indian stock market has seen a positive impact, with the benchmark index opening up 0.3% in early trade on Tuesday. In short, the Indian rupee has depreciated slightly against the Pakistani rupee in the last one year due to the current global situation and regional reforms, but the Indian rupee remains a strong and undisputed winner against the Pakistani rupee due to the strength of the Indian economy in the long-term economic race of 10 years.
