The rupee slid to a record low against the dollar on March 13 as rising crude oil prices and escalating tensions in West Asia triggered fresh pressure on financial markets.
The rupee weakened to 92.39 against the dollar in early trade, breaching the previous lifetime low of 92.35 recorded in the previous session. The rupee has fallen more than 1 percent since the West Asia conflict intensified, reflecting growing pressure on emerging market currencies.
Analysts say the surge in crude oil prices is a key concern for India, which relies heavily on imported energy. Higher oil prices widen the country’s trade deficit and increase inflation risks, both of which tend to weaken the rupee.
The fall in the currency was also driven by a stronger dollar, persistent selling by foreign institutional investors (FIIs) and weakness in domestic equities.
Despite the decline, market participants noted that the rupee has fared better than several other emerging market currencies due to intervention by the Reserve Bank of India (RBI). The central bank has been active in the foreign exchange market to prevent excessive volatility.
Currency analysts expect the rupee to remain under pressure in the near term as global developments continue to dominate market sentiment. For now, the rupee is expected to trade in the range of 91.45–92.75 against the dollar.