Indian Rupee Hits Record Low Amid West Asia Conflict

Rupee Declines to Historic Low

On Friday, the Indian rupee plummeted to an unprecedented low of 94.82 against the US dollar, influenced by ongoing tensions in West Asia.

Initially, the rupee opened at 94.18 in the interbank foreign exchange market but fell by 86 paise to close at this record low, driven by continued foreign fund withdrawals and a downturn in domestic equity markets.

Earlier in the week, the rupee had already dipped below the 94 mark, finishing at 94.05 on Wednesday. Trading was halted on Thursday due to the Hindu festival of Ram Navami.

Foreign institutional investors have intensified their selling of Indian stocks, further exerting pressure on the currency as global funds exit the Indian market.

In the domestic stock market, the benchmark Sensex dropped by 2.25%, while the Nifty index fell by 2.09% on the same day.

Brent crude oil, a global benchmark, was priced at $109.8 per barrel, reflecting a 0.53% increase in futures trading.

Since the onset of the conflict, global oil prices have surged by over 50%, rising from $78 per barrel on February 27, just before the tensions escalated.

Additionally, Iran has largely obstructed the Strait of Hormuz, a crucial maritime route for international commercial vessels, since the conflict began. This strait is vital as it facilitates approximately 20% of the world's petroleum supply.