Rupee falls to record low beyond Rs 93 against US dollar

The rupee fell to a record low on Friday, breaching the Rs 93 mark against the US dollar for the first time, as rising crude oil prices and escalating tensions in West Asia added fresh pressure on the currency.

It weakened to Rs 93.15 against the US dollar in early trade, extending recent losses as investors reacted to the intensifying conflict across the Gulf, which has disrupted energy infrastructure and pushed oil prices higher.

Brent crude remains above $100 per barrel amid fears of prolonged supply disruptions, a major concern for India, which imports a large share of its oil requirements. Higher oil prices raise the country’s import bill, increase demand for dollars and put downward pressure on the rupee.

At the same time, rising geopolitical uncertainty has led to a global risk-off mood, with investors moving towards safe-haven assets such as the US dollar.

This has strengthened the dollar and weighed on emerging market currencies, including the rupee.

Foreign institutional investors (FIIs) have also increased selling in Indian equities amid the uncertainty, adding to the pressure. When global funds pull money out, they convert rupees into dollars, accelerating the currency’s decline.

The US Federal Reserve’s cautious stance has added to the pressure.

With limited room for rate cuts and inflation risks still in focus, the dollar has remained strong, keeping global liquidity tight and reducing the appeal of emerging markets.

For India, the implications go beyond the currency market. A weaker rupee, combined with elevated crude prices, could push up imported inflation, particularly in fuel and commodities, and increase costs for businesses and consumers.

Market participants will now closely track developments in the West Asia conflict, movements in crude oil prices and any signals of intervention from the Reserve Bank of India to stabilise the rupee.