Rupee Hits All-Time Low Against Dollar Amid Middle East Conflict, Crosses 92 for First Time

New Delhi

The Indian rupee plunged to a fresh all-time low against the US dollar on Wednesday, crossing the 92 mark for the first time amid escalating tensions in the Middle East.

At the time of writing, the rupee had fallen as much as 0.8 percent during the day to trade at 92.30 per dollar. The previous record low was 91.875, recorded earlier this year.

Conflict Fears Weigh on Currency

The sharp depreciation is being attributed to fears that the ongoing conflict in the Middle East could push up inflation and widen India’s trade deficit. There are also concerns about foreign capital outflows from emerging markets as investors seek safer assets.

While the rupee weakens against the dollar, crude oil prices have witnessed their sharpest surge since 2020 due to war-related supply concerns. Over the past two days, crude prices have risen 12 to 13 percent, reaching 82 dollars per barrel.

India imports nearly 80 percent of its crude oil requirements. As a result, any sustained rise in oil prices significantly increases the country’s import bill. According to reports, every 1 dollar increase in crude prices raises India’s import bill by approximately 2 billion dollars.

Market Watch on RBI and Global Developments

Analysts have advised importers to wait for dips before purchasing dollars and to closely monitor potential intervention by the Reserve Bank of India.

In a recent report, Bajaj Finserv Asset Management Company stated that despite supportive domestic fundamentals such as stable growth and moderate inflation, external pressures including US tariffs, rising geopolitical tensions, and persistent foreign portfolio investor outflows have pushed the rupee to historic lows.

The report added that investor sentiment improved meaningfully following the announcement of a trade agreement between India and the United States.

Meanwhile, concerns have intensified after reports of retaliatory strikes by Iran on oil and gas facilities and threats to disrupt shipping through the strategic Strait of Hormuz. Tehran has reportedly targeted energy infrastructure in Saudi Arabia, raising fears of supply disruptions, higher oil prices, and further inflationary pressures globally.

With geopolitical risks mounting, currency and commodity markets are expected to remain volatile in the near term.

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