Rupee Falls to Record Low Amid Geopolitical Concerns

Rupee Hits Record Low of 92.18 Against US Dollar as Brent Crude Surges Amid US Iran Conflict​

Indian Rupee Falls 69 Paise in Early Trade​

Mumbai, March 4: The Indian rupee plunged 69 paise to touch a historic low of 92.18 against the US dollar on Wednesday, as surging crude oil prices and rising geopolitical tensions following the escalation of the US Iran conflict weighed heavily on investor sentiment.

At the interbank foreign exchange market, the rupee opened at 92.05 and slipped further to an early low of 92.18 against the American currency. The fall marked a sharp decline from its previous close of 91.49 on Monday. The forex market remained closed on Tuesday on account of Holi.

Brent Crude Crosses USD 82 Per Barrel​

Forex traders indicated that the domestic currency is under severe pressure due to the spike in crude oil prices. Brent Crude crossed the USD 82 per barrel level in futures trading amid the Iran crisis, intensifying concerns across global financial markets.

Brent crude, the global oil benchmark, was trading 1.01 percent higher at USD 82.22 per barrel in futures trading. The surge in oil prices has dampened investor sentiment and added pressure on emerging market currencies, including the rupee.

Dollar Index Edges Higher, USD INR Pair Under Pressure​

The dollar index, which measures the strength of the US dollar against a basket of six currencies, was up 0.03 percent at 99.08.

Traders noted that the USD INR pair remains under pressure as investors shift towards safe haven assets amid escalating geopolitical risks. Persistent foreign capital outflows from the equity markets and concerns that higher import costs could widen the trade balance have further weighed on the rupee.

Rising Crude Prices Raise Import Bill Concerns​

India faces the risk of a sharp increase in its import bill as international crude prices rise. Nearly 85 percent of the country’s fuel requirements are met through imports, making the economy sensitive to fluctuations in global oil prices.

The surge in crude prices is expected to heighten concerns over inflation and external balances, adding to pressure on the domestic currency.

Indian Equity Markets Decline in Early Trade​

Weak sentiment was also visible in the domestic equity markets. The Sensex tumbled 1,671.39 points or 2.08 percent to 78,567.46 in early trade, while the Nifty fell 502.35 points or 2.02 percent to 24,363.35.

On Monday, foreign institutional investors offloaded equities worth Rs 3,295.64 crore, according to exchange data, adding to market volatility.