Explained: why the rupee is stuck near 95 to the dollar, and what it means for you

Where the rupee stands

The rupee crossed 95 to the US dollar for the first time on 30 March 2026, Business Today reported, and its monthly average has stayed close to that level ever since: 95.53 in May, 94.96 in June, 95.86 in July, 95.44 in August and 95.51 in September, according to Federal Reserve data in our data hub. A year earlier, in October 2025, it averaged 88.37. On 28 October it traded at 95.19 at 11 a.m., Kotak Neo reported.

1. Oil

India imports more than four-fifths of the crude oil it uses and pays for it in dollars. Brent crude averaged $70.89 a barrel in February, before the war with Iran began on 28 February, and $114.16 in September, according to the US Energy Information Administration. It settled at $115.32 on 28 October. Every jump in the oil bill means more rupees chasing dollars.

2. A strong dollar and high US rates

The US Federal Reserve raised interest rates in September and markets expect another rise in December; the yield on 10-year US Treasury bonds is above 5%. Higher US returns pull money towards the dollar and away from emerging markets such as India.

3. Foreign investors selling

Foreign portfolio investors have been pulling money out of Indian shares after two years of weak or negative returns — one reason the government is looking at a cut in capital gains tax, according to ANI. Their selling adds to demand for dollars.

What the RBI is doing

In October the Reserve Bank of India raised its repo rate by 25 basis points to 5.50%, in a unanimous decision, and changed its stance from “neutral” to “calibrated tightening”, PSU Connect reported. It forecast consumer-price inflation of 5.2% for 2026–27. The RBI also sells dollars from its reserves to slow the rupee’s fall: on 28 October state-run banks were seen selling dollars, probably on the central bank’s behalf, according to Kotak Neo.

Who loses, who gains

• Costlier: fuel, imported electronics and gold, foreign holidays, and fees for studying abroad. A $10,000 bill cost about ₹8.84 lakh at October 2025’s average rate, and about ₹9.52 lakh at 95.19 — roughly ₹68,000 more.
• Loans: the RBI’s rate rise feeds through to floating-rate loans linked to the repo rate.
• Better off: exporters such as IT services and pharmaceutical companies, and families receiving money from relatives abroad, get more rupees for every dollar.

Related: Explained: the 2026 Iran war · Brent and WTI explained · Oil prices chart