The Indian rupee slipped on Monday, March 18 to breach ₹92.50 against US dollar for the first time ever extending its recent weakness as escalating tensions in the Middle East kept crude oil prices elevated, heightening economic risks for India and weighing on capital inflows. This development comes ahead of the US Federal Reserve’s interest rate decision due later today.
The Indian currency weakened to 92.65 against the US dollar, breaching its previous all-time low of 92.4750 recorded last week. It close at its record low of 92.63 (provisional), down 23 paise from its previous close.
“The rupee traded sharply weaker by 18 paise (-0.21%) at 92.60, marking fresh all-time lows, as persistent pressure from a rising import bill continues to weigh on the currency. Elevated crude oil prices, coupled with ongoing shipment disruptions through the Strait of Hormuz, are increasing concerns over sustained higher import costs for India.
The macro backdrop remains unfavorable, with crude likely to stay elevated for a prolonged period, keeping the rupee under pressure. Market participants are now closely tracking the US Fed policy decision today, which will be a key trigger for dollar direction and, in turn, influence the rupee’s trajectory.
In the near term, the rupee is expected to trade within a weak range of 92.25–92.95 against the US dollar,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.
However, Indian stock markets rallied for the third straight session following gains in global peers despite rising geopolotical tensions in the Middle East and rising crude oil prices.
Sensex soared 858 points or 1.1% to day’s high of 76,929.30 while Nifty 50 jumped 255 points to day’s high of 23,836.
Crude Oil Price Today
Oil prices declined on Wednesday after Iraq resumed crude exports through a pipeline to Turkey’s Mediterranean port of Ceyhan, raising hopes of some supply relief amid ongoing disruptions from Gulf producers.
However, with no signs of easing tensions in the Iran conflict, benchmark Brent crude has remained above $100 per barrel for four consecutive sessions.
After gaining more than 3% in the previous session, Brent futures slipped 31 cents, or 0.3%, to $103.12 per barrel as of 0902 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) crude fell $1.56, or 1.6%, to $94.65.
Iran confirmed on Tuesday that its security chief Ali Larijani was killed in an Israeli strike, marking the most senior figure targeted since Supreme Leader Ayatollah Ali Khamenei was killed on the first day of the U.S.-Israeli war in late February.
Separately, the U.S. military said it had carried out strikes on sites along Iran’s coastline near the Strait of Hormuz, citing threats from Iranian anti-ship missiles to international shipping in the region.
US Federal Reserve Policy Decision Tonight
The US Federal Reserve began its two-day policy meeting on March 17, with the outcome due later on March 18, amid heightened uncertainty from the ongoing US-Iran conflict. Markets widely expect the Fed to keep interest rates unchanged at the March 2026 FOMC meeting.
The tensions, which began on February 28, have disrupted global oil supplies and pushed prices higher, raising concerns over persistent inflation above the Fed’s 2% target while also threatening economic growth. This has put the central bank in a difficult position as it balances inflation control with growth support.
“The upcoming FOMC meeting comes at a time when the U.S. Federal Reserve is still balancing the twin objectives of controlling inflation and maintaining labor market stability. Inflation in the United States peaked at nearly 9% in 2021, prompting the Federal Reserve to embark on one of the most aggressive tightening cycles in decades. Between 2022 and 2023, the Federal Funds Effective Rate was raised from 0.125% to 5.375%. We expect the FOMC to maintain the status quo at the upcoming meeting while emphasizing caution regarding inflation risks. In the near term, financial markets are likely to remain sensitive to oil prices, which are currently hovering near $100 per barrel,” said Nachiketa Sawrikar, fund manager, Artha Global Multiplier fund.
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