The Indian rupee dropped to its lowest-ever level early on Friday amid tensions between Israel and Iran, leading investors to seek safer options.
Analysts noted that the increase in oil prices also played a role in the rupee’s decline, potentially inflating India’s import costs and putting pressure on its current account.
Starting at 83.55 against the US dollar, the rupee weakened further than its previous lowest point of 83.54.
Despite efforts by India’s central bank to stem the currency’s losses, the rupee continues to plummet to unprecedented lows.
Similar to other Asian currencies, the rupee has been affected by concerns over the Middle East situation and expectations of prolonged higher interest rates in the US.
Investor expectations regarding the number of interest rate cuts by the US Federal Reserve this year have diminished recently, following concerns among Fed officials about persistent inflation rates.