Rupee crashes to record low of 92.27 as crude tops $82 on US–Iran war fears

Rupee touches new all-time low: The rupee touched new all-time low on Wednesday against the US dollar, weighed down by a sharp spike in crude oil prices and rising geopolitical tensions following the escalation of the conflict between the United States and Iran.

The domestic currency slipped as much as 77 paise to 92.27 against the dollar, extending its losing streak after settling at 91.49 in the previous session. The forex market was closed on Tuesday due to the Holi holiday, resulting in pent-up selling pressure spilling into Wednesday’s trade.

Crude oil surge weighs heavily on currency

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Forex market participants said the rupee remains under severe pressure due to a sharp rise in crude oil prices, with Brent crude futures crossing the $82 per barrel mark amid fears of supply disruptions linked to the West Asia crisis.

India, which meets nearly 85 per cent of its crude oil requirement through imports, faces the risk of a sharply higher import bill if elevated oil prices persist. Traders warned that sustained crude strength could also worsen the trade deficit and stoke inflationary pressures.

Safe-haven demand lifts dollar

At the interbank foreign exchange market, the rupee opened weaker at 92.05 and slipped further to an intraday low of 92.18, marking a fall of 69 paise from its previous close.

The dollar index, which measures the greenback’s strength against a basket of six major currencies, edged up 0.03 per cent to 99.08. Dealers said global investors are moving toward safe-haven assets amid rising uncertainty, keeping the USD/INR pair under pressure.

Equity sell-off adds to pressure

Weakness in domestic equities further dented sentiment. Benchmark indices opened sharply lower, with the Sensex tumbling over 1,670 points, while the Nifty slid more than 500 points in early trade, reflecting a broad-based risk-off mood across global markets.

Persistent foreign fund outflows have added to the strain on the currency. On Monday, foreign institutional investors offloaded equities worth Rs 3,295.64 crore, according to exchange data.

Outlook remains volatile

Analysts cautioned that the rupee is likely to remain volatile in the near term, with crude oil prices emerging as the key macro trigger. Any further escalation in geopolitical tensions could keep oil prices elevated, intensifying pressure on the currency and India’s external balances.

Market participants said the trajectory of the rupee will continue to be closely linked to movements in crude oil, global risk sentiment and foreign capital flows.