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- Middle East War, Energy Crisis Deepen Woes; Rupee Hits Record Low Vs Dollar
New Delhi12 minutes ago
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The Indian rupee hit a record low of 94.7 against the US dollar on Friday. This decline in the Indian rupee was recorded due to the ongoing war in the Middle East and disruptions in the energy supply chain.
In the last one month alone, the rupee has fallen by about 4%, whereas in this financial year 2025-26 it has fallen by more than 10%. This is the biggest decline in the last 14 years. According to the report of foreign brokerage firm Bernstein, if the Iran war continues, the rupee may soon reach the level of 98.
Biggest fall in rupee since 2011-12
India’s financial year runs from April to March. According to current data, this is the first time in 14 years that the rupee has fallen so much in a single year. Earlier, during the Eurozone crisis in 2011-12, the rupee had fallen by about 14%. At the same time, from March 31, 2025 till now the rupee has fallen by 10% of its value.
Inflation will increase in India due to dollar becoming expensive
The ongoing conflict in the Middle East is being considered the most serious energy crisis of the last several decades. Its direct impact is on India.
oil prices: India’s import bill has increased due to increase in crude oil prices.
Essential goods expensive: The supply of LPG, plastic and other petrochemical products has been affected.
Fear of inflation: Due to the expensive dollar, petrol, diesel and imported goods will become expensive in India, due to which there is a danger of retail inflation increasing.
Studying and traveling abroad is expensive: If you are planning to go abroad or someone of yours is studying abroad, you will have to spend more money to buy dollars.
Electronics and Raw Material Prices: Mobiles, laptops and other parts coming from abroad can be expensive because companies pay for them in dollars.
Will the rupee go to 98 per dollar?
Analysts have started cutting India’s GDP growth estimates. According to a report by foreign brokerage firm Bernstein, if the war continues for a long time, the pressure on India’s current account balance will increase and the rupee may cross the level of 98 per dollar this year. Some analysts have also expressed the possibility of RBI increasing interest rates to control inflation in the next 12 months.
How is the value of currency determined?
If the value of any other currency decreases in comparison to the dollar, it is called falling, breaking, weakening of the currency. In English it is called currency depreciation.
Every country has foreign currency reserves with which it conducts international transactions. The effect of increase and decrease in foreign reserves is visible on the price of currency.
If the dollar in India’s foreign reserves is equal to the rupee reserves of America, then the value of the rupee will remain stable. If our dollar decreases, the rupee will weaken; if it increases, the rupee will strengthen.
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