USD/INR: Indian Rupee Touched Record Low of Over $92 For the First Time

The Indian rupee tumbled to a historic low of 92.02 against the US dollar on Wednesday (March 4), depreciating by 55 paise at the opening bell and breaching the 92/$ mark for the first time ever. The sharp decline followed escalating US-Israeli strikes on Iran, which pushed global crude oil prices higher and intensified demand for the safe-haven US dollar.

The rupee had previously settled at 91.47 per dollar on Monday (March 2), before Indian financial markets remained closed on Tuesday due to a public holiday.

Earlier this year in January, the currency had recorded its previous lifetime low of 91.9875, making Wednesday’s fall a fresh record.

The domestic currency has been weighed down by a combination of surging oil prices, rising geopolitical tensions in the Middle East, and persistent foreign capital outflows.

Dollar Strength and Safe-Haven Demand

The US dollar index climbed to a three-month high of 98.41, supported by euro weakness and a broader global risk-off sentiment. Analysts believe that the combination of a stronger dollar and elevated crude oil prices may continue to weigh on the rupee in the near term.

Also Read: New GDP Data: India’s Dollar Economy Slips to US$3.8 Trillion

Crude Oil Rally Intensifies

Brent crude, the global oil benchmark, climbed more than 1% to $82.32 per barrel on Wednesday (March 4), extending gains after a two-day rally of over 11%. On Tuesday (March 3), prices had briefly surged past $85 per barrel, their highest level in nearly two years, amid fears of supply disruptions.

Impact on Indian Markets

Higher crude oil prices pose multiple challenges for India, a major oil importer. Elevated prices increase the country’s import bill, fuel domestic inflationary pressures, widen the current account deficit, and raise demand for dollars from oil marketing companies. These factors collectively exert downward pressure on the rupee.

Adding to the strain, foreign portfolio investors pulled out more than $350 million from Indian equities on Monday (March 2), reflecting risk aversion amid global uncertainty.

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