Indian rupee, which has turned volatile in last few days is expected to breach 87-mark due to heightened global uncertainties between Israel and Iran, currency experts said.
“The Rupee is projected to depreciate, driven by an increased demand for the safe-haven US Dollar. Elevated crude oil prices, stemming from supply disturbances, are also expected to negatively impact the Rupee's valuation,” said Dilip Parmar, Senior Research Analyst, HDFC Securities.
The global uncertainties have led to rising crude oil prices in the international market and dollar index, which may put pressure on the domestic currency in the coming days.
Since the beginning of the escalation between Iran and Israel, the local currency has depreciated 0.6 percent. The domestic currency was trading at 85.6038 against the US dollar before the start of escalation on June 12, and depreciated to 86.5900 against the greenback at close on June 20.
So far in June, the rupee weakened 1.2 percent while in 2025 it has fallen 1.1 percent, according to the Bloomberg data.
Going ahead, currency experts believe that the local currency will trade in the range of 86.00-87.50 against the US Dollar. “The rupee is expected to trade in a range of 86.00 to 86.85," said Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities.
Further, Parmar from HDFC Securities said that 87.50 levels for rupee could be on the cards.
If Indian rupee breaches the 87-mark, it would be first time since mid-March this year that it will touch that level.
The higher volatility in the domestic currency may force the central bank to curb the volatility.
The war between Iran and Israel has taken a major turn after US President Donald Trump confirmed that American warplanes bombed three nuclear sites in Iran, including the Fordow uranium enrichment plant, a key part of Tehran’s atomic infrastructure buried deep within a mountainside near Qom. This marks the first time the United States has directly struck Iran’s nuclear facilities since hostilities began – a move certain to provoke serious retaliation from Tehran.
With tensions at a boiling point, attention now turns to the extensive network of US military bases and assets across the Middle East, many of which lie within striking distance of Iran or its proxy forces. These bases are now potential targets for Iranian missile, drone, or proxy attacks.
Since the start of this escalation, Brent crude oil prices have shot up sharply and remain on the higher side. Usually, the higher crude oil prices put pressure on the India’s inflation and demand for dollars from oil importers increases leading to falling domestic currency.
India, which imports over 85 percent of its energy needs, faces heightened macroeconomic vulnerability from rising oil prices. A $10 per barrel increase in crude could widen the country’s current account deficit by 0.3 percent of GDP and exert upward pressure on inflation.
Going ahead, Parmar said that going ahead, In addition to geopolitical tensions, short-term movements in the Rupee will be significantly influenced by foreign investment flows.
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