The Indian rupee weakened sharply on Friday, falling to a record intra-day low of ₹92.37 against the US dollar as rising crude oil prices and geopolitical tensions in West Asia unsettled global markets.
In early trade at the interbank foreign exchange market, the rupee dropped by around 12 paise before recovering slightly later in the session. The fall came amid growing concerns that the ongoing conflict in West Asia could disrupt global oil supplies and shipping routes.
Crude oil prices have surged close to $100 per barrel as tensions in the region intensify. The rise in oil prices has increased pressure on the rupee because India imports a large share of its crude oil requirements from the Gulf region. Higher oil prices raise the country’s import bill and weaken the domestic currency.
The depreciation of the rupee has also heightened concerns about inflation in India. Recent data shows that retail inflation has climbed to a 10-month high, with economists warning that sustained high oil prices could push prices further upward.
A weaker rupee makes imports more expensive, including crude oil, fertilisers, electronics and industrial machinery. These increased costs may eventually be passed on to consumers through higher prices for fuel, transportation and several everyday goods.
Market analysts say global uncertainty caused by the West Asia conflict has also affected investor sentiment. During periods of geopolitical tension, investors tend to move funds into safer assets such as the US dollar, which strengthens the dollar and puts pressure on emerging market currencies like the rupee.
Currency traders noted that the Reserve Bank of India (RBI) is closely monitoring developments in the foreign exchange market. The central bank may intervene if the rupee experiences sharp or excessive volatility.
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