The Indian rupee touched an all-time low of 93.24 against the US dollar on Friday, March 20, as escalating conflict in West Asia disrupted global energy supplies and rattled financial markets.
The currency opened the day at 92.92 before breaching the 93-mark for the first time ever, touching 93.08, a fall of 19 paise from its previous closing rate.
This comes after the sharp drop on Wednesday, March 18, when the rupee had already closed at a then-record low of 92.89, a single-day decline of 49 paise.
2 March 2026
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What Is Driving the Fall?
The immediate trigger is the deepening conflict in West Asia, which has disrupted energy supplies and pushed oil prices sharply higher. Crude oil surged to nearly $120 per barrel on Thursday after attacks targeted key energy infrastructure in the Gulf region, though prices eased somewhat on Friday.
The spike in oil prices is particularly concerning for India, which imports a large share of its energy needs. Higher oil prices can simultaneously push up inflation and slow economic growth.
Spooked by the uncertainty, foreign investors have pulled out more than $8 billion from Indian stock markets in March alone, marking the biggest monthly exit since January 2025.
Indian stock markets also bore the brunt of the sell-off on Thursday. The Sensex plunged 2,496.89 points, or 3.26%, to close at 74,207.24, while the Nifty 50 dropped 775.65 points, or 3.26%, to settle at 23,002.15, wiping out all the gains made over the previous three sessions.
A Bounce Back on the Cards?
Despite Thursday's rout, market watchers see room for recovery on Friday. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that markets have been swinging between hope and fear all week, and believes conditions are ripe for a rebound.
He pointed to a statement by Israeli Prime Minister Benjamin Netanyahu, who indicated there would be no further Israeli attacks on Iran's oil and gas infrastructure, as a key reason for cautious optimism. "Israel PM's statement has cooled Brent crude to $106 from the peak of $118 yesterday. Even though the uncertainty continues, the market construct is ripe for a bounce back today," Vijayakumar said.
What Happened in West Asia?
The latest escalation saw Israel strike Iran's South Pars gas field, part of the world's largest natural gas reserve. Iran retaliated by hitting an energy complex in Qatar and targeting other energy infrastructure across the Gulf. The attacks sent energy prices soaring and drew international attention.
US President Donald Trump later said he had not been informed of the Israeli strikes in advance, raising questions about the extent of coordination between Washington and Tel Aviv.
Speaking at a press conference on Thursday, Netanyahu confirmed Israel had "acted alone" and said Trump had requested that no further attacks be made on energy targets.
In response to the crisis, several leading European nations and Japan offered to help secure safe passage for ships through the Strait of Hormuz. The US also outlined steps to boost oil supply in a bid to ease pressure on prices.
