The Indian rupee fell to a record low in early hours on Friday amidst reports about Israeli strikes in Iran making investors scurry to exit risk assets and lap up safe havens.
Rising oil prices also contributed to the weakening of the Indian currency, as it could inflate India’s import bill, putting pressure on the country’s current account, analysts said.
The rupee opened at 83.55 to the US dollar, weakening past 83.54, its previous record low.
The Indian currency was trading at 83.53 at the closing hours on Thursday.
Indian Rupee plunges to record low
Rupee is plunging to record lows despite intervention by India’s central bank to limit the currency’s losses.
Like other Asian currencies, the rupee has been pressured by worries over the Middle East and the likelihood that US interest rates will remain higher for longer.
Of late, investors have scaled down the number of rate cuts the US Fed will deliver this year, following concerns among Fed officials about stubborn inflation rates.
On Thursday, New York Fed President John Williams became the latest official to say that there was no need to rush rate cuts.
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