Rupee hits historic low past Rs 93 against dollar amid oil surge and West Asia tensions
The fall comes as investors grow increasingly cautious over the intensifying conflict in the Gulf region, which has disrupted energy supplies and driven global oil prices sharply higher
PTC Web Desk: The Indian rupee tumbled to an all-time low on Friday, slipping beyond the Rs 93 mark against the US dollar for the first time, as rising crude oil prices and escalating tensions in West Asia rattled financial markets.
In early trading, the domestic currency weakened to Rs 93.15 per dollar, extending its recent downward trend. The fall comes as investors grow increasingly cautious over the intensifying conflict in the Gulf region, which has disrupted energy supplies and driven global oil prices sharply higher.
Brent crude has remained above the $100 per barrel level, raising concerns for India, one of the world’s largest oil importers. Elevated oil prices tend to widen the country’s import bill, increasing demand for the US dollar and putting additional pressure on the rupee.
The global market sentiment has also turned risk-averse due to geopolitical uncertainties. Investors are shifting funds towards safer assets like the US dollar, strengthening the greenback and weakening emerging market currencies, including the rupee.
Adding to the strain, foreign institutional investors have accelerated their selling in Indian equity markets. Such outflows typically involve converting rupees into dollars, which further drags down the domestic currency.
The stance of the US Federal Reserve has compounded the situation. With inflation concerns persisting and limited scope for rate cuts, the dollar has remained firm, tightening global liquidity and reducing investor appetite for emerging markets like India.
The weakening rupee, coupled with high crude prices, may have broader economic implications. It could lead to a rise in imported inflation, especially in fuel and essential commodities, while also increasing operational costs for businesses and households.
Market participants are now keeping a close watch on developments in West Asia, trends in crude oil prices, and any potential intervention by the Reserve Bank of India to curb excessive volatility in the currency.