Mumbai, March 4 The rupee plunged by 56 paise to close at an all-time low of 92.05 against the US dollar on Wednesday, weighed down by soaring crude oil prices in the wake of the Iran crisis.
Forex traders said the dollar index crossed 98 levels due to the risk-off sentiment prevailing globally amid the US-Iran crisis, further pressuring the rupee.
Massive selling in domestic equity markets and the withdrawal of foreign funds further dragged down the Indian currency, they said. Foreign investors sold equities worth Rs 8,752.65 on a net basis on Wednesday, according to exchange data.
At the interbank foreign exchange, the rupee opened at 92.05 and touched an all-time intraday low of 92.35 against the greenback. The currency ended the session at an all-time low of 92.05 against the dollar, registering a steep loss of 56 paise from the previous closing level.
On Monday, the rupee saw a steep loss of 41 paise to settle at 91.49 against the US dollar.
The forex market was closed on Tuesday due to Holi.
"The escalation in the Middle East conflict and the subsequent spike in oil prices have reduced investor risk appetite. Higher oil prices increase inflation concerns and fiscal pressure on India (a major oil importer), leading to selling in bonds and rising yields," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.23 per cent lower at 98.82.
"The dollar index comfortably crossed 98 levels due to the risk-off sentiment prevailing globally, with stock and bond markets getting hit badly, along with Gold and Silver, with predominance of the dollar," Bhansali said.
Brent crude, the global oil benchmark, was up 1.29 per cent at $82.46 per barrel in futures trade, after the US attacks on Iran and Iran's retaliatory measures as threats to energy flows through the Strait of Hormuz continued to underpin disruption worries.
Dilip Parmar, Research Analyst, HDFC Securities, said, "The Indian rupee recorded its steepest two-session decline since May 2025, as soaring energy prices intensified fears of persistent inflation and a widening trade deficit.
This prevailing risk-off sentiment, coupled with high energy costs, is expected to keep the currency under pressure in the near term. Investors are closely monitoring the longevity of the Middle East conflict, as a prolonged standoff would likely drive up the import cost of energy and precious metals while hindering export growth," Parmar said.
The USDINR spot faces immediate resistance at 92.60, while key support is firmly established at 91.80.
On the domestic equity market front, the Sensex tanked 1,122.66 points to settle at 79,116.19, while the Nifty dived 385.20 points to 24,480.50.
