On Friday, the Indian rupee fell to a record low of 96.1350 per US dollar, driven by escalating oil prices nearing $110 per barrel. This decline represents a 0.4% drop from the previous session and a 1.5% decrease week-on-week. The rupee has depreciated over 6% year-to-date, making it the worst-performing currency in Asia, largely due to persistent capital outflows and concerns over the balance of payments amid the ongoing conflict in the Middle East. The rising oil prices have heightened fears of global inflation, prompting expectations of interest rate hikes among central banks in the region. Data released indicated a widening merchandise trade deficit of $28.38 billion for India in April, further complicating economic conditions. With India relying on imports for over 80% of its crude oil, the country faces significant challenges as inflation rates rise, leading analysts to foresee two potential 25-basis-point rate hikes by the end of the year. The bond yield also increased to 7.07%, reflecting investor concerns.