Story Content

The Indian rupee lost its biggest single-day drop in several months, surpassing the psychological mark of the 92 level and dropping to an all-time low of 92.33 against the US dollar in early trading on March 9, 2026. The currency had fallen by more than 1.2 percent (approximately 110 paise) compared to the end on Friday, an indication of immense pressure on both fronts.

The main trigger was an acute exponential growth of the conflict in the Middle East as Brent crude oil reached its highest level in about four years, at over 118 per barrel, in response to new US-Israeli attacks upon Iranian targets, creating concern about a shortage of supply across the Strait of Hormuz. Increased oil import amounts increase the current account deficit of India and create inflationary worries.

To make the weaknesses bigger were the general strength of the dollar, FII outflows in the face of global risk-off atmospherics, and a crashing local equity market (Sensex down nearly 2,400 points at open). Intervention by RBI is likely to be in the form of dollar sales and liquidity operations to limit volatility, although analysts warn that the volatility may further slide to 93 in case of tension. Exporters can benefit in the short term, but consumers and importers will be confronted with increased costs.