Indian rupee in free fall, breaches 93/$ for first time
What's the story
The Indian rupee has hit a record low, falling to 93.24 against the US dollar on March 19. The fall is mainly due to a disruption in global energy supplies amid the ongoing Middle East conflict. This development has raised concerns over India's growth-inflation balance, with economists warning that rising energy prices could impact growth and increase inflation in the country.
Currency impact
Rupee falls nearly 2% since start of US-Iran war
The rupee's value has fallen by nearly 2% since the start of the US-Iran war. The fall comes as oil prices surged to nearly $120 per barrel after attacks on key energy infrastructure in the Gulf region but retreated Friday amid international efforts to secure safe passage for ships through strategic waterways like Strait of Hormuz.
Investor response
Foreign investors pull out over $8 billion from local stocks
The rupee's pressure is unlikely to ease anytime soon as fears of an oil price shock have prompted foreign investors to pull out over $8 billion from domestic stocks in March. This marks the largest monthly outflow since January 2025. Major European countries and Japan have offered assistance in ensuring safe passage for ships through the Strait of Hormuz, while the US has announced plans to increase oil supply.