The rupee fell by 69 paise on Wednesday, hitting a record low of 92.18 against the US dollar amid rising oil prices and a pullback in riskier assets. Analysts warned that the currency may remain under pressure until tensions in the Middle East subside.Ongoing tensions in the Middle East have sent shockwaves through global markets, strengthening the dollar and pushing crude oil prices to around $85 per barrel. These developments have raised concerns about inflation and pose risks to economies like India that rely heavily on energy imports.So far this year, the rupee has lost more than 2%, after losing nearly 5% in 2025. Although the recent trade deal between the United States and India briefly boosted foreign flows and provided some relief, renewed conflict across the Middle East quickly erased these gains.
The currency suffered significant losses earlier this week. On Monday, it fell 41 paisas to settle at 91.49 against the dollar, in the wake of intensified US and Israeli attacks on Iran. According to forex traders, the rupee has come under pressure due to massive selling in domestic stock markets and withdrawal of foreign funds. Meanwhile, Dalal Street was also trading in the red. In early trade, the Nifty50 fell below 24,400, standing at 24,380.45 at 9:16 am, down 485 points or 1.95%.
The BSE Sensex fell 1,644 points, or 2.05%, to 78,594.94, reflecting investor concerns about escalating tensions in the Middle East and widening conflict between the US, Israel and Iran.
Global financial markets have moved into risk-off mode as concerns about rising inflation have rocked stocks and bonds around the world.“Global stocks fell as energy supply disruptions in the Middle East threatened to reignite price pressures,” said Devarsh Vakil, head of primary research at HDFC Securities. “Crude oil rose about 5 percent, while wholesale natural gas in Europe rose 40 percent.” “Prolonged tensions between the United States, Israel, and Iran are mounting pressures on India with respect to its current account, inflation expectations, and currency stability.
The expert also told ANI that higher crude oil prices will raise the country’s import bill, widen the current account deficit, weaken the rupee, stoke inflation and stimulate foreign capital outflows.