Indian Rupee Reaches Record Low Against US Dollar at 93.60, Potential for Further Depreciation Amid Global Geopolitical Tensions

USD vs INR: Indian Rupee Depreciates to Record Low

The Indian rupee (INR) has depreciated to a record low of 93.7350 per US dollar, marking its sharpest single-day decline in over four years. The rupee's decline is attributed to concerns over the impact of Iran's war-driven disruptions to global energy supplies on Asia's third-largest economy.

Key Drivers of the Rupee's Decline

The rupee's depreciation has been driven by persistent Foreign Institutional Investor (FII) outflows, with foreign investors offloading over Rs. 1 lakh crore in CY2026. This reflects risk-off sentiment toward emerging markets amid heightened global uncertainty. Additionally, the sharp appreciation of the US dollar index from around 95.50 to above 99.50 has exerted additional pressure on emerging market currencies, including the rupee.

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Escalating Geopolitical Tensions and Oil Prices

The escalation of geopolitical tensions in West Asia has worsened the situation further, leading to a sharp jump in Brent crude oil prices to around $120 per barrel. This has heightened concerns over imported inflation and a widening current account deficit. Given that India imports nearly 85–88% of its crude needs, rising oil prices lead to higher demand for dollars from importers, putting downward pressure on the rupee.

Domestic Factors

Domestic factors have also contributed to the rupee's weakness. A roughly 13% correction in Indian equity markets from their peak has hurt investor sentiment, leading to capital outflows and increased currency volatility.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

RBI Intervention and Future Outlook

The Reserve Bank of India (RBI) has actively intervened in the forex market to smooth volatility and curb excessive depreciation. However, global cues remain dominant, and the US Federal Reserve's hawkish stance continues to support the dollar, limiting any meaningful recovery in the rupee. According to market experts, the Indian rupee is likely to remain under pressure in the near term, with the immediate depreciation expected towards 94.80–95.