Indian rupee hits record low against dollar

India’s rupee briefly slid to an all-time low of 95.3 to the US dollar on Thursday before recovering to 94.2 by the close, as oil prices surged and foreign investors sold Indian equities, according to Scroll.in. The move came after Brent crude jumped above $126 a barrel at one point — a level not seen in four years — amid reports that US President Donald Trump is considering an extended blockade of Iranian ports. India imports 88% of its crude oil, and much of it transits the Strait of Hormuz.

Currency moves of this size tend to look like market noise until they collide with a country’s import bill. Oil is priced in dollars; when crude rises and the local currency falls, refiners and the state’s broader energy system pay twice. Scroll reports that Brent was around $78 on February 27, the day before the current conflict began, and that prices have been repriced around the risk that shipping lanes and export routes will be constrained for longer than traders first assumed. The Wall Street Journal reported that Trump instructed officials to prepare for an extended blockade to pressure Iranian exports and force Tehran toward a deal, a planning detail that markets treated as policy even before any formal announcement.

The mechanics run straight through Hormuz. Iran has “effectively blocked” the strait since the war broke out on February 28, Scroll writes, and about 20% of global petroleum supply normally passes through it. India’s dependence is unusually direct: beyond crude, about half of its natural gas requirements are imported, and much of that supply chain also relies on passage through the Gulf. That means the rupee’s weakness is not only a financial-market story but a logistics-and-insurance story: higher war-risk premiums, longer routes, and delayed cargoes can show up first as dollar demand in the currency market.

Domestic markets are already reflecting the strain. Scroll notes that the Sensex fell 0.4% and the Nifty 0.7% on Thursday, while foreign institutional investors sold equities worth more than Rs 2,460 crore on Wednesday. For policymakers, this is an awkward combination: tighter financial conditions arrive through capital outflows at the same time as imported inflation rises through energy. Rate hikes can support the currency but raise borrowing costs; subsidies can soften fuel shocks but shift the bill to taxpayers and widen fiscal pressure.

The trigger for the latest oil repricing sits outside India’s control. The US and Israel attacked Iran on February 28, with Washington describing itself as Israel’s security guarantor, and Iran retaliated with strikes on US bases and Israel while also targeting Gulf cities and some ships, Scroll reports. In that environment, even rumours about maritime restrictions can be enough to move benchmark crude, because physical traders must book tankers and insurance weeks ahead.

The rupee’s intraday low was 95.3. By the end of the session it had recovered — but the oil price that pushed it down was still above $110.