Rupee tumbled 66 paise on Wednesday, sliding to a record low of 92.15 against the US dollar amid surging oil prices and a pullback from riskier assets. Analysts caution that the currency could remain under strain until tensions in the Middle East subside. The ongoing war in the Middle East has sent shockwaves through global markets, strengthening the dollar and driving crude oil to around $85 per barrel. These developments have heightened inflation fears and posed risks for economies like India that rely heavily on energy imports. Rupee has lost more than 2% this year, after shedding almost 5% in 2025. Although a recent US-India trade deal briefly boosted foreign inflows and provided some relief, the resurgence of conflict across the Middle East quickly erased these gains. The currency had suffered significant losses earlier this week. On Monday, it dropped 41 paise to settle at 91.49 against the dollar, following intensified US and Israeli attacks on Iran. According to forex traders, Rupee was under pressure due to massive selling in domestic equity markets and withdrawal of foreign funds. Meanwhile, Dalal Street was also trading in red. In early trade, Nifty50 fell below 24,400, standing at 24,380.45 at 9:16 AM, down 485 points or 1.95%. BSE Sensex dropped 1,644 points, or 2.05%, to 78,594.94, reflecting investor concerns over escalating Middle East tensions and the widening US-Israel-Iran conflict. Global financial markets moved into risk-off mode as concerns over rising inflation rattled stocks and bonds across the world. “Global equities slid as disruptions to Middle East energy supplies threatened to reignite price pressures. Crude oil gained around 5 per cent, while European wholesale natural gas surged a punishing 40%,” said Devarsh Vakil, Head of Prime Research at HDFC Securities. “Prolonged tensions among the United States, Israel, and Iran are mounting pressure on India across its current account, inflation outlook, and currency stability. Elevated crude prices stand to raise the country’s import bill, widen its current account deficit, weaken the rupee, stoke inflation, and trigger foreign capital outflows,” the expert further told ANI.
