The rupee saw a see-saw movement during the week amid the West Asia conflict, spike in crude oil prices and FPI-related outflows from the domestic equity markets, plunging to a record closing low of 92.15 per US dollar on March 4 and making a smart recovery to 91.60 the next day on heavy RBI intervention.
The Indian currency closed the week ended March 6, , at 91.74 per US dollar, down 77 paise as compared with the previous Friday’s close of 90.97. It touched an all-time intraday low of 92.30 on Wednesday.
Amit Pabari, MD, CR Forex Advisors, said that over the past week, the rupee has traded under significant pressure, largely driven by global developments rather than domestic factors.
“With tensions escalating in the Middle East region, Brent crude has surged close to $87 per barrel. For an oil-import-dependent economy like India, even a moderate rise in crude prices carries significant macroeconomic implications.
“A $10 increase in oil prices could expand India’s import bill by nearly $15 billion and widen the current account deficit by about 0.3 per cent of GDP. This effectively translates into stronger dollar demand and increasing pressure on the rupee,” he said.
Pabari observed that against this backdrop, dollar/rupee moved back toward the 92.30 levels during the week on Wednesday, reflecting both higher oil-driven dollar demand and cautious global investor sentiment.
However, the Reserve Bank of India stepped in with intervention on Thursday, pushing the rupee back toward the 91.50 levels and offering temporary relief to the currency, which triggered a sharp one-day rebound toward the end of the week.
“While this is a strategy the RBI has deployed in the past to curb excessive volatility, such support may prove difficult to sustain if strong and persistent dollar demand continues in the market. Going forward, a sustained rise in crude oil prices, continued FII outflows, a strengthening dollar index, and any further escalation in geopolitical tensions are likely to keep the rupee under pressure.
“Technically, the 91.20–91.50 zone is emerging as strong support for USD/INR. On the upside, the pair remains vulnerable. A gradual move toward the 92.50–93.00 region could still be seen as global risks and oil prices remain elevated,” Pabari said.
Moody’s Ratings has warned that costly energy imports in the wake of the Middle East conflict would weaken the rupee, raise inflation, worsen the current account balance and complicate monetary policy as well as fiscal management if they lead to expanded subsidies to help offset the economic shock, warned.
Published on March 6, 2026
