Rupee Plumps to Record Low: RBI Likely to Step In as Mideast Tensions Roil Markets

The Indian rupee has hit an all-time low, breaching the 92 mark against the US dollar, as escalating tensions in the Middle East drive up oil prices and weigh on investor sentiment. The Reserve Bank of India (RBI) is likely intervening in the forex market to prevent further depreciation, having sold dollars to steady the rupee.

The rupee’s slide is largely attributed to the surge in global oil prices, with Brent crude rising to around $85 per barrel, exacerbating India’s current account deficit and inflation concerns. The conflict has also triggered a risk-off sentiment, prompting investors to flee emerging markets like India.

Analysts expect the RBI to continue managing volatility, but the rupee’s prospects remain uncertain as long as oil prices stay elevated. The currency has already lost over 2% this year, following a 5% decline in 2025.