Mumbai, March 9 The rupee crashed to its all-time low of 92.21 against the US dollar on Monday, losing 39 paise during the session, as global crude oil prices saw a sharp increase, and the US dollar strengthened amid escalating conflict in the Middle East.
Forex traders said heightened geopolitical uncertainty poses risks of driving up energy costs, which could widen the trade deficit and fuel inflationary pressures.
Moreover, the withdrawal of foreign funds amid intense selling in domestic equity markets further put pressure on the rupee, they added.
At the interbank foreign exchange market, the rupee opened at 92.22 and briefly rose to 92.15 but continued to decline throughout the session, recording a day's low of 92.35.
At the end of Monday's trading session, the rupee was quoted at 92.21, down 39 paise from its previous close.
The rupee depreciated by 18 paise against the US dollar on Friday, closing at 91.82 against the American currency.
"In line with the broader weakness in Asian currencies, the rupee has depreciated against the US Dollar as international crude oil prices surged past USD 100 per barrel, reclaiming levels not seen since 2022," said Dilip Parmar, Research Analyst, HDFC Securities.
Parmar further noted that soaring energy costs pose a significant threat to India's trade deficit, GDP growth, and inflation, given the country's high reliance on oil imports.
"Amidst heightened geopolitical uncertainty, the spot USDINR is expected to remain firm, with a resistance level near 93.00 and established support at 91.80," he said.
Meanwhile, Brent crude, the global oil benchmark, was trading higher by 10.93 per cent at USD 102.82 per barrel in futures trade as the war between the US and Israel intensified with Iran.
The dollar index, which gauges the strength of the US dollar against a basket of six currencies, was trading 0.29 per cent higher at 99.27.
On the domestic equity market front, the Sensex plunged by 1,352.74 points to settle at 77,566.16, while the Nifty tumbled by 422.40 points to 24,028.05.
Foreign institutional investors sold equities worth Rs 6,345.57 crore on a net basis on Monday, according to exchange data.
Meanwhile, India's forex reserves jumped by USD 4.885 billion to an all-time high of USD 728.494 billion during the week ended February 27, the Reserve Bank said on Friday.