Historic Low for the Rupee

Picture Credit: by India TV News

The Indian rupee has plunged to a historic low, breaching the 93-per-dollar mark for the first time as geopolitical tensions ripple through global markets. The sharp decline reflects mounting fears over the economic fallout from the ongoing Iran war, particularly its disruption of energy supplies and the resulting surge in oil prices.

The currency weakened by around 0.7% to 93.2750 against the U.S. dollar, extending a broader slide that has seen it lose more than 2% since the conflict began. For an economy heavily dependent on imported oil, the spike in crude prices poses a serious threat. Rising energy costs are expected to stoke inflation while dampening economic growth, placing policymakers in a difficult position.

Investor sentiment has also taken a hit. Foreign investors have withdrawn over $8 billion from Indian equities this month alone, marking the largest outflow since early 2025. This exodus has added further pressure on the rupee, amplifying volatility in financial markets.

Oil prices briefly surged close to $120 per barrel amid fears of supply disruptions, particularly around the strategically vital Strait of Hormuz. Although prices eased slightly following international efforts to secure shipping routes, uncertainty remains high.

Picture Credit: by Reuters

The rupee’s struggles are not new. Over the past year, it has faced multiple challenges, including trade tensions with the United States and conflicts in key energy-producing regions. The currency has depreciated about 7% against the dollar during this period, alongside losses against other major currencies.

Despite these pressures, intervention by the Reserve Bank of India has helped contain the damage. By selling more than $50 billion in foreign exchange reserves, the central bank has managed to slow the currency’s decline. However, with the conflict showing no signs of easing, the rupee remains vulnerable, and further depreciation toward 95 per dollar cannot be ruled out.