Kamal Ghorui
The ongoing crisis in the Middle East continues to rattle financial markets worldwide, sending shockwaves to oil baskets, stock markets and currencies. Rupee is no stranger to the impact! Over the past one year, the currency has continuously slipped to its record lows, first hitting 90 and then eventually beyond the 93 per US dollar mark, inching close to the psychological 94 levels. As rupee continues to drift, questions are mounting over its next move: will it stabilise or extend its slide further? Traders are closely tracking the rising volatility, with the 94-per-dollar level now in sharp focus as the US and Iran tensions continue to boil, fueling fears over potential disruptions to energy supplies.The week earlier, on Friday, the currency had settled at a record closing low of 93.71 per US dollar, and market participants expect its next move to be largely influenced by crude oil prices, developments around the Strait of Hormuz, and overall risk sentiment in global markets. Attention is also on the Reserve Bank of India for any steps it may take to smooth volatility when trading resumes.The latest uncertainty stems from heightened tensions between the US and Iran, with warnings and counter-warnings raising fears of disruption to global oil flows through the critical West Asia shipping route. Any escalation could further tighten supply conditions and weigh on the rupee.According to analysts cited by ET, the currency’s breakdown below the 93.50 level signals continued weakness, with near-term direction hinging on external triggers like oil prices. For instance, if crude oil sustains above the $100 per barrel mark, rupee could drift toward the 94–95 range in the coming sessions.A treasury official at a private sector bank said the central bank is likely to remain active at these levels to curb excessive volatility, although the outlook remains highly fluid. He noted that in the absence of escalation, rupee could see temporary support, but renewed tensions may push it beyond the 94 mark.Geopolitical developments have been dominating sentiment, particularly statements from US President Donald Trump, who has warned Iran over reopening the Strait of Hormuz, a key passage for global energy shipments. Such developments have added to uncertainty in currency and commodity markets alike.According to market experts, rupee’s trajectory is now closely tied to movements in global crude benchmarks. With Brent crude trading near elevated levels, import costs for India could rise, adding further pressure on the current account and the currency.Treasury heads said intermittent intervention from the central bank could help anchor the rupee in the short term, but sustained pressure is likely if oil prices remain elevated and geopolitical tensions continue to escalate.Overall, traders say the coming sessions will be crucial in determining whether the rupee stabilises near current levels or weakens further toward the 94–95 range, depending on global developments and energy market dynamics.
