MUMBAI: The rupee plumbed to a new low and is sniffing at 95.50-level, having already touched 95.44 on Tuesday, down 21 paise from Monday’s close as the market sentiment remains fragile after renewed military exchanges between US and Iranian forces in the Gulf, pushing up oil prices further. The unit closed trade at 95.25, a new low, down 2 paise from the previous record closing low on Monday.
According to Dilip Parmar, the senior research analyst at HDFC Securities, “the rupee tumbled to a new record low due to the escalating tension in the Middle East and the spike in the four-year-old Russia-Ukraine war fuelled concerns over a global inflationary spike.
“This heightened risk aversion, combined with surging crude prices, has stoked fears of a widening balance of payments (BoP) deficit. This pressure is compounded by steady capital outflows and a cautious stance from the central bank. In the near term, the rupee faces resistance at 95.70, while support is seen at 94.80,” he told TNIE.
Forex traders said investor anxiety due to instability in the Gulf is causing massive capital flight into safe-haven assets, with the US dollar acting as the primary beneficiary. Moreover, Brent crude price is hovering near $113 a barrel, maintaining pressure on oil-importing economies like ours.
Market men see the renewed hostilities in between the US and Iran, including attacks on critical infrastructure in the UAE, triggering risk aversion among investors, prompting a shift away from emerging market assets.
In the interbank forex market, the rupee opened at marginally weak at 95.30, down 7 paise from the record low marked Monday, against the greenback and slipped further during the session to touch an intraday record low of 95.44. It eventually closed at 95.25, down from Monday’s all-time low closing of 95.23.
Anuj Choudhary, research analyst at Mirae Asset Sharekhan, the rupee is likely to remain under pressure due to elevated crude prices, continued importer demand for dollars, and ongoing tensions involving the US and Iran.
He, however, noted that possible intervention by the Reserve Bank could offer support at lower levels. He expects the rupee spot rate to move within the 95.10–95.55 range in the near term.
Meanwhile, the dollar index, which tracks the US currency against a basket of six major currencies, was trading 0.10 per cent higher at 98.47.
On the domestic equities front, benchmark indices ended lower, with the Sensex declining 251.61 points to close at 77,017.79, while the Nifty slipped 86.50 points to settle at 24,032.80. Foreign funds have been dumping domestic equities like hot coal and ripped the market off Rs 1.8 trillion or $20.5 billion in just March and April, much more than what they had taken out in the whole of 2025 which was only $18.9 billion.
