Indian Rupee Hits Record Low Amid Rising Tensions

ISLAMABAD: (Web Desk) – The Indian Rupee weakened further on Tuesday, dropping by 20 paisas to hit a fresh record low of 95.43 against the US dollar during early trading. The decline comes amid fragile investor sentiment driven by rising geopolitical tensions in the Gulf region.

Currency traders noted that uncertainty surrounding escalating tensions between the United States and Iran has pushed investors toward safer assets. As a result, the US dollar has strengthened, benefiting from increased demand as a global safe haven.

The US Dollar Index, which measures the dollar’s performance against a basket of major currencies, rose by 0.14 percent to 98.52. Meanwhile, global oil prices remain elevated, with Brent Crude Oil trading near $115 per barrel—adding pressure on oil-importing economies like India.

In the interbank foreign exchange market, the rupee opened at 95.30 against the dollar before sliding further to its historic low, reflecting a continued weakening trend compared to its previous close.

Strait of Hormuz, the Petrodollar System, and America’s Strategic Imperative

Market experts say the surge in oil prices is closely linked to increased US efforts to secure shipping routes in the Gulf, particularly around the Strait of Hormuz, amid ongoing tensions with Iran.

According to Anil Kumar Bhansali of Finrex Treasury Advisors LLP, the rupee is facing mounting pressure as the stronger dollar and rising crude oil prices combine to weigh on the currency. Increased dollar demand from oil importers and foreign investors is also contributing to the downward trend.

Analysts warn that as long as geopolitical tensions persist and oil prices remain high, the rupee is likely to stay under pressure against the US dollar.