Mumbai

The Indian rupee plunged to a fresh all-time low on Tuesday, weakening by 35 paise to close provisionally at 95.63 against the US dollar amid escalating geopolitical tensions in West Asia and mounting concerns over India’s external sector outlook.

At the interbank foreign exchange market in Mumbai, the domestic currency opened at 95.57 against the greenback and continued to weaken during the session, touching a record intraday low of 95.74 before settling at 95.63. On Monday, the rupee had already dropped sharply by 79 paise to end at 95.28 against the dollar.

Forex market participants attributed the fresh sell-off to growing risk aversion in global markets following renewed tensions between the United States and Iran. Concerns intensified after US President Donald Trump reportedly rejected Tehran’s latest response to a US-backed peace initiative, raising fears of prolonged conflict and tighter global energy supplies.

Currency dealers also said market sentiment was influenced by Prime Minister Narendra Modi’s recent appeal for fuel conservation and reduced import-driven expenditure, which many traders interpreted as an acknowledgement of growing pressure on India’s trade deficit and balance of payments if crude oil prices remain elevated.

Analysts said rising global crude prices and a strengthening US dollar continued to weigh heavily on the rupee. Brent Crude surged over 3 per cent to USD 107.43 per barrel in futures trade, fuelling concerns over higher import costs and inflationary pressures for major energy-importing economies such as India.

Meanwhile, the dollar index, which measures the strength of the American currency against a basket of six major global currencies, rose to 98.28, up 0.33 per cent.

Market experts said intervention by the Reserve Bank of India could help stabilise the rupee if volatility intensifies further, though sentiment remains fragile amid uncertainty over global energy supplies and geopolitical developments.

The weakness in the currency also mirrored a sharp sell-off in domestic equities. The BSE Sensex plunged 1,456.04 points to close at 74,559.24, while the NIFTY 50 dropped 436.30 points to settle at 23,379.55.

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Foreign institutional investors also remained net sellers, offloading equities worth Rs 8,437.56 crore in the previous trading session, adding further pressure on market sentiment.