Rupee Slides Past 93 Per Dollar Amid Oil Shock and Iran Conflict Concerns
The Indian rupee weakened sharply on Friday, breaching the 93-per-dollar mark for the first time as escalating concerns over an Iran-led conflict disrupted global energy supplies. The currency dropped about 0.7% to 93.2750 against the U.S. dollar, surpassing its previous record low of 92.63 earlier in the week. Since the onset of the conflict, the rupee has declined over 2%, reflecting investor anxiety about rising crude oil prices and their impact on India, the world’s third-largest oil importer.
The surge in oil prices—briefly nearing $120 per barrel—has raised fears of slower economic growth and higher inflation in India. This has triggered significant foreign investor outflows, with more than $8 billion pulled from Indian equities this month alone, marking the largest exit since January 2025. Analysts warn that if the geopolitical tensions persist, the rupee could weaken further toward the 95-per-dollar level, given India’s heavy reliance on energy imports.
Despite intervention efforts by the Reserve Bank of India, which sold over $50 billion between April and December 2025 to stabilize the currency, pressure on the rupee remains intense. Over the past year, it has depreciated around 7% against the dollar and weakened against other major currencies. The ongoing oil shock, coupled with trade tensions and foreign capital outflows, has also dragged Indian equities to yearly lows, pushed up bond yields, and heightened concerns over widening fiscal and current account deficits.
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