Indian Rupee Hits Record Low Amid Global Economic Pressures

New Delhi. The value of the Indian currency fell to its lowest level ever on Monday. The local currency has come under pressure as investors' interest in risky assets has decreased due to the Iran war causing crude oil prices to skyrocket in the global market and global bond yields to rise, further deepening the economic crisis for India, the third-largest fuel importing country.

In morning trade, the value of the rupee against the dollar weakened by 0.3 percent to 96 rupees 2275 paisa. This surpassed the previous historical low. Earlier, the rupee-dollar exchange rate was at a record low of 96 rupees 1350 paisa.

Since the start of the Iran war, the currencies of Asian countries dependent on oil exports, including India, have been under pressure. The rupee has been the worst-performing currency in Asia in 2026. Along with this, the Indian rupee has fallen to a low level for the fifth consecutive trading day.

According to traders, if the Reserve Bank of India (RBI), India's central bank, had not intervened by selling dollars, the rupee's decline would have been even steeper. Along with market intervention, Indian policymakers have also taken rare regulatory steps to support the rupee. The recent decision to ban most silver imports is also said to be part of that.

Since the start of the Iran war, the Indian rupee has weakened by about 5.5 percent. Analysts at BFA Global Research said in a note that as oil prices are likely to remain high for a long time, the Indian rupee could reach 96 per dollar by mid-2026 and 98 by the end of the year.

According to analysts, the risks to economic growth have weakened the possibility of foreign investment returning to the stock market. Additionally, low yields, high hedging costs, rising fiscal deficits, and concerns about interest rate hikes also increase the risk of reducing foreign investment in the debt market.

Since March, foreign investors have withdrawn more than $23.5 billion from the Indian stock and bond markets.