Indian Rupee Drops Past 93 to Record as Iran War Risks Mount

Bundles of 500 rupee banknotes. Photo by Prakash Singh /BloombergArticle content(Bloomberg) — India’s rupee weakened past 93 per dollar to a fresh low as prospects of a prolonged Middle East conflict raise concerns over a widening current-account gap.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentThe currency dropped as much as 0.7% to 93.28 per dollar, catching up with weakness in regional peers as trading resumed after a public holiday on Thursday. The central bank has been intervening to support the currency, with traders citing its presence on Friday.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentCrude prices have swung wildly amid attacks on some of the Middle East’s most important energy facilities. While Brent has retreated from its highest close since July 2022 following assurances from US and Israeli leaders, it remains well above the $70 baseline assumed by the Reserve Bank of India in October.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article content“We see the Indian rupee as vulnerable and USD/INR likely rising above the 95 levels if the Iran and Middle East conflict is sustained and the Strait of Hormuz remains closed,” said Michael Wan, currency strategist at MUFG Bank Ltd.Article contentA 10% gain in global crude prices leads to a 15 basis-point drop in economic growth and a 30 basis-point rise in inflation, according to the central bank.Article contentEven before the conflict broke out, the RBI had been intervening for months to steady the rupee, as high US tariffs spurred record equity outflows. Its net-short dollar book — a measure of the degree to which it has sold forward its stockpile of US currency — is nearing $100 billion across offshore and onshore markets, Bloomberg News reported on Thursday, citing people familiar with the matter. Article contentArticle contentGlobal funds have sold over $9 billion in Indian equities this year, adding to the record $19 billion withdrawals in 2025. They’ve also been selling local debt, with outflows from index-eligible bonds at $1.4 billion in March, heading for a record monthly outflow.Article contentGoing long on the dollar against the rupee is one of Nomura Holdging Inc.’s key trades amid currently higher crude prices. It expects the rupee to fall to 96 to a dollar by end-June.Article contentThe brokerage cites India’s high exposure to energy prices, foreign fund outflows and the RBI likely being amenable to gradual rupee depreciation among the reasons.Article contentTrending Public-private partnership launches $1.3-billion fund to purchase unsold GTA condos Real Estate Trans Mountain readies expansion in 2027 as pipeline space fills up Oil & Gas Posthaste: Canada sets two new population records as 'demographic engine' backfires News William Watson: Some surprising numbers on wealth and home ownership FP Comment Most Canadians have yet to file taxes, CRA data show. Here are five tips to get you going Personal Finance Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Public-private partnership launches $1.3-billion fund to purchase unsold GTA condos Real Estate Trans Mountain readies expansion in 2027 as pipeline space fills up Oil & Gas Posthaste: Canada sets two new population records as 'demographic engine' backfires News William Watson: Some surprising numbers on wealth and home ownership FP Comment Most Canadians have yet to file taxes, CRA data show. Here are five tips to get you going Personal Finance