Indian Rupee Slips to Record Low

The Indian rupee weakened to around 93 per dollar, marking its lowest level on record, pressured by surging oil prices and heightened geopolitical tensions in the Middle East. Brent crude and India’s crude basket climbed above $105–$111 per barrel following attacks on key energy infrastructure and threats to supply routes through the Strait of Hormuz. Higher oil import costs fueled concerns over inflation and a widening current account deficit, with India importing over 80% of its energy needs. Importers stepped up dollar purchases, while foreign investors have pulled nearly $8 billion from Indian equities so far in March, intensifying capital outflows. Meanwhile, the Reserve Bank of India has intervened heavily, with net forward dollar sales approaching $100 billion across onshore and offshore markets, using forward contracts and swaps. However, ongoing pressure from thin liquidity and persistent external risks still pushed the rupee past the 92.50 level.

USDINR increased to an all-time high of 93.13. Over the past 4 weeks, US Dollar Indian Rupee gained 2.25%, and in the last 12 months, it increased 7.85%.

The Indian rupee hovered around 92.45 per dollar, trading near record lows, pressured by elevated crude prices and sustained foreign equity outflows. Oil prices remain high after surging since the Iran conflict began in late February, as military disruptions and risks to major oil shipping routes stoke global energy concerns. Persistently high energy costs have increased dollar demand from importers, widening India’s trade deficit and creating a material terms-of-trade shock. Investor sentiment also stayed fragile, as overseas portfolio investors have withdrawn over $8 billion from Indian equities since the conflict began, coinciding with a more than 6% drop in the Nifty 50 so far this month, reducing foreign currency inflows and amplifying depreciation pressures amid firm US dollar strength. The Reserve Bank of India has intervened in FX markets to stabilize the currency near 92.50, helping limit further declines. Focus now shifts to the Federal Reserve, with rates likely steady.