Rupee at Record Low
The Indian rupee weakened to an all-time low of 92.35 against the US dollar on March 10, 2026, breaching the previous record of 89.40 set in September 2023. The currency has depreciated 4.9% since the start of the US-Israel-Iran conflict on February 28, making it one of the worst-performing Asian currencies over the period.
Key Drivers
The primary driver is India's heavy dependence on oil imports — the country buys approximately 85% of its crude requirements from abroad. With Brent crude averaging $95–$100/barrel in early March versus $73/barrel in late February, India's oil import bill has surged by an estimated $2.3–$3 billion per month. The expanded current account deficit has put structural selling pressure on the rupee.
Foreign portfolio investors (FPIs) have pulled approximately $4.8 billion from Indian equities and debt markets since February 28, seeking the safety of US Treasuries and dollar assets as geopolitical uncertainty rises globally.
RBI Intervention
The Reserve Bank of India intervened in the foreign exchange market on multiple occasions during the day, selling dollars from its foreign reserves to cap the rupee's decline. The RBI's current foreign exchange reserves stand at $623 billion, providing ample firepower for sustained intervention, though economists noted that "burning reserves to defend an unsustainably weak currency is a temporary measure, not a solution."
Impact on Borrowers and Consumers
A weaker rupee has direct implications for Indian borrowers with foreign currency loans — ECBs (External Commercial Borrowings) — and for import-dependent businesses. Pharmaceuticals, electronics, and specialty chemicals sectors are most exposed. Consumer price inflation is expected to accelerate, with Goldman Sachs India economist Prachi Mishra projecting CPI to reach 6.8% by April 2026 from 5.9% in January.
