Mumbai: The Indian rupee plunged to an all-time closing low of 93.98 against the US dollar on Monday, registering a steep decline of 35 paise from its previous finish of 92.63. During the session, the currency breached its earlier record low of 93.73 and even slipped beyond the 94 mark in post-market trade.
The sharp depreciation was driven by heightened geopolitical tensions in West Asia, which raised concerns over inflation, economic growth and the current account deficit. Investors responded by offloading domestic equities, bonds and the currency amid fears of prolonged disruptions in global energy supplies.
Foreign portfolio investors intensified the pressure by withdrawing over $11 billion from Indian equities and debt markets in March, marking the largest outflow since October 2024.
Market sentiment was further rattled after the United States issued a 48-hour ultimatum to Iran regarding the Strait of Hormuz. However, some relief emerged later as the deadline was postponed, offering mild support to global financial markets.
Analysts noted that surging crude oil prices have significantly weakened the rupee’s outlook, given India’s dependence on imports. Since the escalation of the Iran conflict in late February, the domestic currency has depreciated by nearly 3%, reflecting sustained external pressures.