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In a major development, the Indian rupee on Friday breached the psychologically important 96-level against the US dollar for the first time in history. The domestic currency hit a record intra-day low of 96.14 before settling near 95.86-96.05, reflecting sharp depreciation amid multiple global headwinds.

Analysts attribute the fall primarily to surging crude oil prices nearing $110 per barrel due to West Asia tensions, persistent foreign institutional investor outflows, and a strengthening US dollar. As India imports nearly 90% of its oil, higher energy costs are widening the current account deficit and putting pressure on the currency.

The Reserve Bank of India (RBI) is believed to have intervened in the forex market to curb excessive volatility, but the rupee has still lost nearly 7% year-to-date. This marks a continuation of its weakness, having already breached multiple record lows in recent sessions.

Economists warn that sustained depreciation could fuel imported inflation, raise fuel and import costs, and impact corporate balance sheets with foreign debt. While some experts see potential for further slide toward 98-100 if oil prices remain elevated, others expect RBI and government measures to stabilize the situation. This historic low has sparked concerns over economic stability even as India navigates a challenging global environment.