The Indian rupee is expected to remain under strong pressure this week and may test the ₹93.50 per US dollar level, as it faces what a Union Bank of India report describes as a “triple threat” of geopolitical tensions, rising crude oil prices, and a strengthening US dollar.
According to the report, the outlook for the rupee is “decidedly bearish,” driven by the breakdown of US-Iran diplomatic talks and heightened tensions in the Persian Gulf, including concerns over disruptions in the Strait of Hormuz. These developments have pushed Brent crude above $102 per barrel, intensifying pressure on India’s external balance.
The report highlights that the rupee’s near-term direction will largely depend on whether oil prices stabilise or continue to rise. While the Reserve Bank of India’s forex reserves of about $697.1 billion provide a buffer against excessive volatility, they may not fully offset sustained external shocks.
The currency has seen sharp swings in recent sessions, briefly recovering from record lows near ₹95.23 per dollar before weakening again toward ₹93.30. Much of this volatility has been linked to rapidly evolving geopolitical developments and their impact on global energy markets.
A temporary easing of tensions earlier in the week helped the rupee strengthen to around ₹92.40 as crude slipped below $100 per barrel. However, that relief proved short-lived after talks collapsed and fresh escalation fears triggered another spike in oil prices above $100, renewing pressure on the currency.
