Daijiworld Media Network - Mumbai

Mumbai, Mar 20: The Indian rupee plunged to a record low on Friday, breaching the 93 mark for the first time as rising crude oil prices and escalating geopolitical tensions in West Asia weighed heavily on the currency.

The rupee weakened to 93.15 against the United States dollar in early trade, extending recent losses amid heightened uncertainty in global markets.

A key factor behind the fall is the surge in global crude prices, with Brent crude holding above $100 per barrel due to fears of prolonged supply disruptions. The ongoing tensions involving Iran, Israel, and the United States have raised concerns over energy infrastructure and shipping routes.

For India, which depends heavily on oil imports, higher crude prices increase the import bill and boost demand for dollars, putting downward pressure on the rupee.

Geopolitical uncertainty has triggered a ‘risk-off’ sentiment globally, with investors shifting towards safe-haven assets such as the US dollar. This has strengthened the dollar and weakened emerging market currencies, including the rupee.

Foreign institutional investors (FIIs) have intensified selling in Indian equities amid market volatility. Such outflows lead to conversion of rupees into dollars, accelerating the currency’s depreciation.

The cautious policy stance of the US Federal Reserve has further supported the dollar. With inflation risks persisting and limited scope for rate cuts, global liquidity remains tight, reducing the attractiveness of emerging markets.

A weaker rupee, coupled with elevated oil prices, could push up imported inflation in India, particularly in fuel and commodity sectors, increasing costs for businesses and consumers.

Market participants are now closely watching developments in West Asia, crude price trends, and any potential intervention by the Reserve Bank of India to stabilise the currency.