The Indian rupee continued to face downward pressure on March 13, weakening by 16 paise at the open to trade near Rs 92.35 against the US dollar. The move comes after the currency briefly touched a record low of Rs 92.37 in the previous session, reflecting growing strain from rising global oil prices and heightened geopolitical uncertainty.

The latest slide in the currency is closely linked to the sharp rebound in crude oil prices, which have climbed back above $100 per barrel. Brent crude has been hovering near $101 as geopolitical tensions in the Middle East intensify. Iran’s continued disruption of shipping through the Strait of Hormuz a crucial route for global oil and natural gas flows has renewed fears of prolonged supply constraints in global energy markets.

For India, the world’s third-largest oil importer, the surge in crude prices directly affects the external balance and currency stability. Higher oil prices increase the country’s import bill, widen the current account deficit, and trigger stronger demand for US dollars from domestic oil marketing companies. This demand typically exerts sustained pressure on the rupee, particularly when global risk sentiment is already fragile.

The rupee had closed the previous session at Rs 92.19 before slipping again in early trade. According to market participants, traders have largely remained cautious, with many waiting to see whether the Reserve Bank of India steps in again to stabilise the currency.

Market observers believe the central bank has already been active in the foreign exchange market. When the rupee briefly touched its all-time low during the previous session, traders reported signs of intervention, with the RBI likely selling dollars to prevent a sharper depreciation. The central bank has historically used its substantial forex reserves to smooth excessive volatility in the currency rather than defend a specific level.

Analysts note that without central bank intervention, the rupee could have depreciated further. Currency strategists at Finrex Treasury Advisors indicated that persistent dollar demand from foreign portfolio investors and domestic oil companies has outweighed RBI support measures so far. According to the firm, the currency remains structurally vulnerable while global commodity prices remain elevated.

The geopolitical backdrop has added a new layer of uncertainty to global financial markets. Iran’s blockade around the Strait of Hormuz has disrupted shipping activity through one of the world’s most strategically important energy corridors. A significant share of global crude oil shipments passes through this narrow waterway, meaning any prolonged disruption can quickly tighten global supply and push prices higher.

While the United States has temporarily allowed certain purchases of Russian oil in an attempt to stabilise global supply, the measure has done little to ease market concerns so far. Traders remain wary that the ongoing conflict could keep oil prices elevated for an extended period, prolonging inflationary pressures worldwide.

For India, sustained crude prices above $100 create multiple macroeconomic challenges. Higher oil costs feed directly into domestic inflation through fuel prices, transport costs, and manufacturing inputs. At the same time, a weaker rupee makes imports more expensive, amplifying the inflationary effect across sectors ranging from energy to chemicals and fertilisers.