Mumbai, May 14 (PTI) The rupee weakened to a fresh record low of 95.96 before closing with a marginal gain of 2 paise at 95.64 against the US dollar on Thursday, as it resisted pressure from a firm American currency and inflation worries amid elevated energy prices.

Forex traders said the West Asia crisis and the blockade of the Strait of Hormuz have disrupted crude petroleum imports into India. Also, the sharp rise in crude prices has made fuel imports costlier.

The rupee has become the worst-performing currency in Asia for the year, registering a loss of over 6 per cent so far this year, as elevated crude oil prices, a strong dollar and concerns over the West Asia crisis weighed on investor sentiments, traders said.

At the interbank foreign exchange market, the rupee opened lower at 95.74 against the American currency.

In a volatile trade, the USD/INR pair witnessed an intra-day high of 95.61 and an all-time intraday low of 95.96 against the greenback before settling at 95.64, up 2 paise from its previous close.

The rupee on Wednesday slipped to an intraday low of 95.80 against the US dollar, and settled at 95.66 against the greenback.

Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, said the rupee initially weakened but later recovered sharply, following reports of a proposal to reduce taxes for foreign investors in an attempt to support capital inflows and stabilize the rupee.

"If concrete policy steps are implemented to bring back foreign investor participation, the rupee may find stronger support despite ongoing pressure from elevated import bills and global uncertainty," Trivedi said, adding, "Near-term rupee range is expected between 95.25–96.00." According to Anuj Choudhary, Research analyst at Mirae Asset ShareKhan, tensions between the US and Iran and foreign fund outflows may pressurise the rupee.

However, any intervention by the RBI and import duty hike on gold and silver may support the rupee at lower levels. "USD/INR spot price is expected to trade in a range of 95.50 to 96.10," Choudhary added.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 98.51, down 0.01 per cent.

Brent crude, the global oil benchmark, was trading higher by 0.50 per cent at USD 106.16 per barrel in futures trade.

On the domestic equity market front, Sensex jumped 789.74 points to settle at 75,398.72, while the Nifty climbed 277 points to 23,689.60.

Foreign Institutional Investors turned net buyers and purchased equities worth Rs 187.46 crore on Thursday, according to exchange data.

On the domestic macroeconomic front, wholesale price inflation shot up to a 42-month high of 8.3 per cent in April on the back of a spike in energy prices that followed the disruptions caused by the West Asia conflict.

Wholesale price index (WPI) inflation was 3.88 per cent in March, while it was 0.85 per cent in April last year.

"Positive rate of inflation in April 2026 is primarily due to an increase in prices of mineral oils, crude petroleum & natural gas, basic metals, other manufacturing and non-food articles, etc," data released by the commerce and industry ministry showed. PTI DRR HVA

Rupee pressure from strong dollar and crude price surge as traders watch inflows, RBI support and inflation concerns. The rupee weakened to a fresh all-time low against the US dollar before closing marginally higher, with pressure from a firm dollar, elevated crude prices, inflation worries and disruptions to crude imports linked to the West Asia crisis and the Strait of Hormuz blockade. Traders also cited foreign fund outflows, possible tax reductions for foreign investors, RBI intervention and higher import duty on gold and silver as factors that could influence rupee support and near-term range.