So far in 2026, the rupee has declined 2.63%, including a 1.8% drop since the conflict began, reflecting persistent external pressures.
The latest bout of weakness comes amid disruptions to global energy supplies following the escalation of conflict in the Middle East, raising concerns over the growth-inflation balance for Asia’s third-largest economy.
Crude oil prices surged to nearly $120 per barrel on Thursday (March 19) after attacks on key energy infrastructure in the Gulf region, before easing on Friday (March 20) as major economies moved to stabilise supply. European nations and Japan signalled support to secure shipping through the Strait of Hormuz, while the United States outlined steps to boost oil output.
Despite the pullback, pressure on the rupee is expected to persist. Concerns over higher energy costs have triggered sustained foreign outflows, with investors pulling out over $8 billion from Indian equities so far in March, marking the largest monthly outflows since January 2025.
Economists have cautioned that a prolonged rise in oil prices could weigh on India’s growth outlook while adding to inflationary pressures.
What’s weighing on the rupee
- Oil shock: Brent crude up ~40% since the Iran conflict began
- Dollar demand: Higher import bill pushing up demand for the greenback
- Foreign outflows: Continued selling by overseas investors
- Stronger dollar: Global risk aversion supporting the US currency
RBI intervention in focusThe Reserve Bank of India (RBI) is estimated to have sold over $15 billion in March to stabilise the rupee. Intervention typically intensifies toward the financial year-end, making near-term support likely.
Rupee trend in Q4 (March-end levels)
| Year | March-end level | 3-month average |
| 2017 | 64.85 | 66.91 |
| 2018 | 65.11 | 64.35 |
| 2019 | 69.18 | 70.43 |
| 2020 | 75.33 | 72.45 |
| 2021 | 73.13 | 72.89 |
| 2022 | 75.9 | 75.21 |
| 2023 | 82.15 | 82.18 |
| 2024 | 83.35 | 83.03 |
| 2025 | 85.45 | 86.56 |
Trend: The rupee has steadily weakened over the years, with Q4 often reflecting added pressure from external balances and dollar demand.
Asian currency performance since Iran conflict (vs USD)
| Currency | Change |
| Hong Kong dollar | -0.13% |
| Offshore Chinese yuan | -0.23% |
| Chinese yuan | -0.41% |
| Singapore dollar | -0.97% |
| Japanese yen | -1.07% |
| Malaysian ringgit | -1.11% |
| Indonesian rupiah | -1.26% |
| Indian rupee | -1.79% |
| Taiwanese dollar | -2.31% |
| South Korean won | -3.69% |
| Philippine peso | -4.05% |
| Thai baht | -5.20% |
(With inputs from CNBC TV18’s Ritu Singh)
First Published: Mar 20, 2026 9:08 AM IS
