New Delhi, March 4: The Indian rupee reached a new all-time low against the dollar on Wednesday, crossing the 92 mark for the first time due to escalating conflicts in the Middle East.
As of the latest reports, the rupee depreciated by up to 0.8 percent during the day, currently standing at 92.30. The previous record low was 91.875, observed earlier this year.
The decline in the rupee is attributed to rising inflation and trade deficit concerns stemming from the ongoing Middle East turmoil, alongside fears of foreign investments exiting emerging markets.
While the rupee struggles against the dollar, crude oil prices have surged, marking the largest increase since 2020 due to the conflict. Over the past two days, crude oil prices have risen by 12-13 percent, reaching $82 per barrel.
India imports 80 percent of its crude oil needs from abroad. An increase in oil prices significantly raises the country’s import bill. Reports indicate that for every dollar increase in crude oil prices, the market’s import bill rises by approximately $2 billion.
Analysts are advising importers to wait for a potential dip in the dollar before purchasing and to closely monitor the Reserve Bank of India’s actions regarding the rupee.
Bajaj Finserv AMC recently reported that despite a supportive domestic environment of steady growth and moderate inflation, American tariffs, rising geopolitical concerns, and ongoing struggles with Foreign Portfolio Investments (FPI) have pushed the rupee to its lowest level yet.
The report noted a meaningful improvement in sentiment following the announcement of the India-U.S. trade agreement.
Concerns are growing over supply disruptions due to Iranian retaliatory attacks on oil and gas facilities, which could further increase oil prices and inflation worries. Tehran has reportedly targeted oil and gas infrastructure in Saudi Arabia and threatened to disrupt shipping in the strategic Strait of Hormuz.
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My name is Narendra Jijhontiya. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including TECHNOLOGY, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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