Rupee Weakens To 93.39 Against US Dollar As Oil Prices And Capital Outflows Rise
Rupee hits record low of 93.39 against US dollar as West Asia tensions and oil prices fuel risk aversion.
The Indian rupee plunged sharply on Monday, falling 56 paise to close at a record low of 93.39 (provisional) against the US dollar, as escalating geopolitical tensions in West Asia and a surge in global crude oil prices triggered broad risk aversion in financial markets. The currency opened weaker and remained volatile throughout the trading session, reflecting heightened uncertainty among investors.
Forex market analysts attributed the sharp depreciation to renewed instability following failed US-Iran peace talks and growing concerns over potential disruptions in the Strait of Hormuz. Reports suggesting restrictions on Iranian ports further intensified fears of supply chain disruptions in global energy markets, pushing crude oil prices higher and strengthening demand for the US dollar as a safe-haven currency.
At the interbank foreign exchange market, the rupee moved within a narrow intraday range, touching a low of 93.40 and a high of 93.25 before settling at 93.39 against the greenback. This marked a decline of 56 paise from its previous close of 92.83, extending losses seen in the previous session when the currency had already weakened by 32 paise.
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Market participants noted that sustained foreign institutional investor (FII) outflows added further pressure on the rupee, as global investors reduced exposure to riskier assets, including emerging market equities. The combination of a stronger US dollar index, higher crude oil prices, and continued capital outflows contributed to the currency’s downward trajectory.
In parallel, global benchmarks reflected the broader risk-off sentiment, with the dollar index rising 0.32 percent to 98.75 and Brent crude futures surging 7.69 percent to USD 102.52 per barrel. Domestic equity markets also declined, with the Sensex falling 702.68 points and the Nifty slipping 207.95 points, underscoring widespread weakness across asset classes.
Despite the currency pressure, India’s foreign exchange reserves rose significantly by USD 9.063 billion to USD 697.121 billion in the week ended April 3, according to the Reserve Bank of India. Meanwhile, analysts warned that ongoing geopolitical uncertainty could continue to weigh on the rupee, even as long-term economic forecasts from institutions like the Asian Development Bank project steady growth for the Indian economy.
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