The Crossbill News Desk
India’s currency came under intense pressure on Wednesday (March 4), with the rupee tumbling 67 paise to settle at a record low of Rs 92.16 against the US dollar.
Mounting crude oil prices, fears of a ballooning import bill and an already widening current account deficit combined to weigh heavily on the domestic unit, amplifying concerns about macroeconomic stability.
The Iran crisis, roiling markets globally have had a sharper impact on India’s currency despite support from the Reserve Bank of India. This is due to trade and tariff uncertainties and a massive outflow of money away from India, earning the rupee the title of “Asia’s worst performing currency” last year.
Forex traders told news agency PTI that “the dollar index crossed 98 levels on the risk-off situation prevailing all around the globe amid the U.S.-Iran crisis, further pressurising the rupee”.
They also told the news agency that “massive selling in domestic equity markets and withdrawal of foreign funds further dragged the Indian currency down”. The rupee fell to as low as Rs 92.35 to a dollar, before recovering somewhat. Yet, the fall was sharp and steep.
The downward trajectory had begun earlier in the week, with Monday witnessing the sharpest single-day decline in a month. Markets remained shut on Tuesday for Holi, offering only a brief pause before volatility resumed. Brent crude, the global oil benchmark, climbed 1.29% to $82.46 per barrel, intensifying worries over imported inflation and fiscal pressures.
Domestic equities mirrored the turmoil. The 30-share Sensex plunged 1,122.66 points, while the Nifty dropped 385.20 points.
On Monday, foreign institutional investors, according to exchange data cited by PTI, offloaded equities worth Rs 3,295.64 crore, further straining market sentiment.
Although the Reserve Bank of India has intervened in recent months to steady the rupee, apprehensions over foreign exchange reserves have reportedly made policymakers more guarded in their approach.
The ongoing conflict in West Asia has injected additional instability into an economy already grappling with volatility. This comes despite official assertions that India remains the “fastest growing” major economy and is performing “very well”.
Fresh GDP estimates have revised the size of the economy for 2023–24 and 2024–25 downward by 3.8% each. The economy is now pegged at $3.8 trillion, with the much-touted $5 trillion target appearing more distant, as reported by The Hindu.
While the government has reiterated that India has become the world’s fourth largest economy — a position also reflected in International Monetary Fund data released late last year — the revised figures place India at $3.8 trillion, still well below Japan’s $4.46 trillion. The updated data has therefore sparked renewed debate over growth projections, fiscal resilience and the broader trajectory of Asia’s third-largest economy.
Mounting crude oil prices, fears of a ballooning import bill and an already widening current account deficit combined to weigh heavily on the domestic unit, amplifying concerns about macroeconomic stability.
The Iran crisis, roiling markets globally have had a sharper impact on India’s currency despite support from the Reserve Bank of India. This is due to trade and tariff uncertainties and a massive outflow of money away from India, earning the rupee the title of “Asia’s worst performing currency” last year.
Forex traders told news agency PTI that “the dollar index crossed 98 levels on the risk-off situation prevailing all around the globe amid the U.S.-Iran crisis, further pressurising the rupee”.
They also told the news agency that “massive selling in domestic equity markets and withdrawal of foreign funds further dragged the Indian currency down”. The rupee fell to as low as Rs 92.35 to a dollar, before recovering somewhat. Yet, the fall was sharp and steep.
The downward trajectory had begun earlier in the week, with Monday witnessing the sharpest single-day decline in a month. Markets remained shut on Tuesday for Holi, offering only a brief pause before volatility resumed. Brent crude, the global oil benchmark, climbed 1.29% to $82.46 per barrel, intensifying worries over imported inflation and fiscal pressures.
Domestic equities mirrored the turmoil. The 30-share Sensex plunged 1,122.66 points, while the Nifty dropped 385.20 points.
On Monday, foreign institutional investors, according to exchange data cited by PTI, offloaded equities worth Rs 3,295.64 crore, further straining market sentiment.
Although the Reserve Bank of India has intervened in recent months to steady the rupee, apprehensions over foreign exchange reserves have reportedly made policymakers more guarded in their approach.
The ongoing conflict in West Asia has injected additional instability into an economy already grappling with volatility. This comes despite official assertions that India remains the “fastest growing” major economy and is performing “very well”.
Fresh GDP estimates have revised the size of the economy for 2023–24 and 2024–25 downward by 3.8% each. The economy is now pegged at $3.8 trillion, with the much-touted $5 trillion target appearing more distant, as reported by The Hindu.
While the government has reiterated that India has become the world’s fourth largest economy — a position also reflected in International Monetary Fund data released late last year — the revised figures place India at $3.8 trillion, still well below Japan’s $4.46 trillion. The updated data has therefore sparked renewed debate over growth projections, fiscal resilience and the broader trajectory of Asia’s third-largest economy.
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