Indian Rupee Extends Decline

The Indian rupee weakened past 93 per dollar, extending its decline after hitting record lows, as surging oil prices and heightened geopolitical tensions in the Middle East continued to weigh on sentiment. The standoff between President Donald Trump and Iran over control of the Strait of Hormuz has intensified, with the US issuing a 48-hour deadline to reopen the waterway, while Iran has warned it could shut the passage entirely if its infrastructure is targeted. The currency has fallen 3% since the conflict began and remains under pressure as the crisis enters its fourth week. Although traders anticipate the possibility of central bank intervention to curb speculative positioning after the sharp decline, sentiment remains fragile. Market participants are now awaiting preliminary purchasing managers’ index data for further insight into economic activity amid ongoing uncertainty.

USDINR increased to an all-time high of 93.59. Over the past 4 weeks, US Dollar Indian Rupee gained 2.75%, and in the last 12 months, it increased 8.75%.

The Indian rupee weakened past 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.