Daijiworld Media Network - Mumbai

Mumbai, Mar 12: The Indian rupee fell to a record low of Rs 92.36 against the United States Dollar on Thursday, weighed down by surging crude oil prices, a stronger dollar and continued foreign investor outflows.

Currency markets came under pressure as global investors reacted to escalating tensions in West Asia and a sharp rise in oil prices. Benchmark Brent Crude climbed above $100 per barrel following recent attacks on oil tankers in Iraqi waters, raising concerns over potential disruptions to global energy supply routes.

India, which imports more than 80 per cent of its crude oil requirements, typically faces increased pressure on its currency when oil prices rise. Higher oil costs raise the country’s import bill and increase demand for dollars from oil marketing companies, pushing the rupee lower.

The strengthening of the US dollar against most global currencies has further added to the pressure. Investors have increasingly shifted funds toward the dollar, widely seen as a safe-haven asset during periods of geopolitical uncertainty, affecting emerging market currencies including the rupee.

Another factor contributing to the currency’s decline has been sustained selling by Foreign Institutional Investors in Indian equities. When overseas investors pull money out of domestic markets, they convert rupees into dollars, increasing demand for the US currency.

A weaker rupee can make imports such as crude oil, electronics and other goods more expensive, potentially adding to inflationary pressures in the economy. However, export-oriented sectors such as information technology and pharmaceuticals may benefit as their overseas earnings become more valuable when converted into rupees.

Currency markets are expected to remain volatile in the near term as investors closely monitor developments in West Asia, movements in global oil prices and cross-border capital flows.