The ongoing war between Iran and the US–Israel is not only affecting gas and energy sectors, but its impact is also being seen on the currencies of several countries. India has not remained untouched by this. The Indian rupee has crossed the key level of 94. In intraday trade, it reached a record low of 94.40 against the US dollar. Since the war began last month, it has declined by about 3.5%, and since March 31, 2025, it has fallen by more than 10%.
Since the start of the Middle East conflict, the Indian rupee has been witnessing a sharp decline. The sudden surge in oil prices has put pressure on the rupee. Rising oil prices have also raised concerns about increasing inflation worldwide.
Why is Indian Rupee Falling?
Currency experts say that the biggest factor affecting the Indian rupee is the conflict in West Asia (Iran War). Even more important is the uncertainty surrounding how this conflict will end.
An analyst at CR Forex Advisors said, ‘Due to this prolonged standoff, markets remain cautious. As a result, hopes for a quick resolution have weakened, and this uncertainty is once again impacting emerging market currencies like the rupee.’
Persistent pressure and movements in gold and silver prices have also impacted sentiment in the currency market. Prices have declined as sentiment has shifted back to ‘risk-off,’ although it is not as extreme as what we saw three days ago. Gold has fallen below the key level of $4,500 per ounce, while silver is trading well below the $70 per troy ounce mark.
Earlier, a similar sharp fall in the Indian rupee (Indian Rupee Down) was seen in 2013–14, when the Federal Reserve signaled that it would begin withdrawing the monetary stimulus introduced after the crisis. This event, known as the ‘Taper Tantrum,’ caused turmoil in global markets. It was the most volatile period for the rupee since the global financial crisis.
