Rupee breaches 93 per US dollar to hit record low as Iran war risks deepen

Published Fri, Mar 20, 2026 · 11:57 AM

[MUMBAI] The Indian rupee fell past the 93-per-US dollar level for the first time on Friday (Mar 20), on heightened worries over the hit from the Iran war-led disruption of global energy supplies on Asia’s third-largest economy.

The rupee fell about 0.7 per cent to 93.2750 against the US dollar, eclipsing its previous low of 92.63 hit on Wednesday. India money markets were closed on Thursday due to a local holiday.

The currency has slumped more than 2 per cent since the Iran war broke out, on concerns that a prolonged spike in crude prices would slow growth and raise inflation in the world’s third-biggest oil importing and consuming country.

The oil shock has prompted foreign investors to pull out more than US$8 billion from Indian stocks this month in the largest outflow since January 2025.

With no let-up in the conflict that has killed thousands of people, spread to the wider Middle East and hit global energy supplies, the rupee looks increasingly vulnerable and could be prone to slip to 95 per US dollar.

“The rupee could be more vulnerable if the conflict drags on, which mainly reflects its exposure to higher energy prices,” said Vivek Rajpal, Asia macro strategist at JB Drax Honore.

“Currencies backed by strong policy frameworks and external balances should remain relatively resilient, while energy-dependent currencies are likely to stay vulnerable.”

Oil prices surged to nearly US$120 per barrel, before retreating on Friday as some countries offered to join efforts to secure safe passage for ships through the Strait of Hormuz.

One battle after another

For over a year now, the rupee has been pummelled by headwinds ranging from trade frictions with the US to military conflicts in key energy-producing regions and intense foreign selling of stocks, pushing investors to raise short bets on the currency.

The rupee has depreciated 7 per cent against the greenback over the last year, and has also weakened sharply against the euro, British pound and Chinese renminbi.

Now, the oil shock has dragged Indian shares to the weakest level in about a year, lifted bond yields, and led to worries over widening fiscal and current account deficits.

To be sure, frequent market interventions by the central bank have helped slow the slide in the rupee, helping the currency endure the shock better than peers such as the South Korean won and Thai baht.

The Reserve Bank of India net sold over US$50 billion between April and December 2025, and the tally is likely to go up further this year, analysts estimate. REUTERS