Indian rupee breaches Rs 92 per dollar to hit record low amid Middle East tensions

Indian Rupee

The Indian rupee breached a new record low on March 4, when it crossed the Rs 92 per dollar mark, as oil prices soared amid geopolitical tensions in the Middle East and investors scrambled toward safe-haven assets.

The local currency was trading at Rs 92.17 to the dollar, as compared to Rs 91.47 in the previous trading session. The currency and fixed income markets were closed on March 3 due to a public holiday.

The last few days have seen Brent crude prices spike to as much as $85 per barrel as military tensions between the United States, Israel, and Iran have escalated. On Saturday, the United States and Israel launched a joint military operation against Iran. During the strikes, Iranian Supreme Leader Ayatollah Ali Khamenei was killed.

Iran retaliated with missile and drone strikes, targeting bases in the US and Israel. In the ongoing conflict, the Strait of Hormuz has been shut down. Nearly 40% of India’s energy imports arise from that particular route.

“This is now a goldmine for exporters who can now sell at above Rs 92 levels for their cash/spot receivables, while importers now need to wait for dips to buy the dollar. We will also wait for any RBI action on the rupee,” analysts from Finrex Treasury Advisors said.