The Indian rupee weakened further on Friday, falling 17 paise to close at a record low of 92.68 against the US dollar, as global geopolitical tensions and market volatility weighed heavily on the domestic currency.

The rupee opened at 92.58 in the interbank foreign exchange market and showed significant intraday volatility, touching a high of 92.41 before sliding to a low of 92.76. The decline comes amid heightened uncertainty linked to the ongoing US-Iran situation, which has kept global financial markets on edge and increased pressure on emerging market currencies.

Forex traders attributed the sharp movement to multiple factors, including the deadline for the Reserve Bank of India’s directive requiring banks to limit their overnight foreign exchange positions to $100 million. The measure, aimed at reducing speculative volatility, coincided with fragile global conditions, amplifying fluctuations in the currency market.

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Analysts also pointed to instability in West Asia, particularly concerns around the Strait of Hormuz, a key global oil transit route. Continued uncertainty over the region has supported higher crude oil prices, with Brent crude trading near $96.86 per barrel. Rising oil prices typically widen India’s trade deficit, putting additional downward pressure on the rupee.

The US dollar index, which tracks the greenback against a basket of major currencies, remained relatively firm, reflecting sustained demand for safe-haven assets despite a tentative ceasefire. Market participants noted that the truce remains fragile, contributing to cautious investor sentiment and intermittent demand for the dollar.

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