Indian Rupee Hits All-Time Low Amid West Asia Conflict

The Indian rupee has fallen to a historic low of 94.05 against the US dollar, driven by escalating tensions in West Asia and significant foreign fund outflows. Despite positive movements in the domestic equity markets, the currency continues to struggle. Investors have been selling off equities, contributing to the rupee's decline. The situation is further complicated by rising global oil prices and restrictions in key maritime routes. This article explores the factors influencing the rupee's performance and the broader economic implications.

By Narendra Chaudhary Mar 25, 2026, 18:21 IST

Rupee Declines Significantly

On Wednesday, the Indian rupee reached an unprecedented low, falling past the 94 mark against the US dollar, largely influenced by ongoing tensions in West Asia.

The currency opened at 93.94 in the interbank foreign exchange market but dropped by 29 paise, closing at 94.05 against the dollar as foreign fund outflows persisted.

Previously, the rupee had decreased by 23 paise, finishing at 93.76 against the dollar on Tuesday.

Amid the conflict, foreign institutional investors have intensified their selling of Indian equities, exerting additional pressure on the rupee. The currency tends to weaken as global investors withdraw funds from the Indian market.

On Tuesday alone, foreign institutional investors sold equities worth approximately Rs 8,000 crore, according to exchange data.

Despite a decline in global crude oil prices and positive trends in domestic equity markets, the rupee showed no signs of recovery.

The benchmark Sensex in the domestic equity market rose by 1.63%, while Nifty increased by 1.72% on Wednesday.

Brent crude, the global oil benchmark, was trading 4.33% lower at $99.97 per barrel in futures trading.

Since the onset of the conflict, global oil prices have surged by over 50%. The price was recorded at $78 per barrel on February 27, just before the conflict escalated.

Iran has effectively restricted access to the Strait of Hormuz, a crucial maritime route for international commercial vessels, since the conflict began. This strait is vital as it facilitates about 20% of the world's petroleum supply.