The Indian rupee has plunged amid the rising US dollar spree, fueled by the ongoing US-Iran conflict. The current geopolitical tensions are aggressively favoring the US dollar, with other currencies experiencing a sharp pullback at the moment. However, the Indian rupee in particular is at a losing end, hitting a staggering 93.96 against the US dollar. What elements are currently weighing heavily on INR besides the current war dynamics? Let’s explore in depth.

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INR Hits All-New Low of 93.96 Against the US Dollar

The ongoing US-Iran war is the main catalyst triggering the decay of the Indian rupee against the US dollar. The closure of the Strait of Hormuz has led Asian markets to panic, with speculations of a prolonged closure wreaking havoc globally, impacting the Asian markets gravely. This bloodbath has primarily resulted from the 48-hour ultimatum that Trump has issued, warning Tehran of incessant attacks if the country does not open access to the SoH again.

Tehran, in return, has issued counter warnings, vowing to attack major US assets and desalination plants if provoked. This brewing conflict is now taking a toll on the global markets, with the US dollar being the only exception to this change. The fear of rising inflation is keeping the dollar steady for now. On the other hand, the looming energy crisis due to the closure of the Strait of Hormuz is pressuring Asian investors to take a step back and stay vigilant for now.

In the middle of this, India is suffering the most as its currency faces increased FII outflows, triggering major volatility in INR. Rising oil prices are also weighing on the Indian economy. Moreover, INR briefly touched the 94 mark, showcasing the wide volatility prevalent in the market. It’s presently sitting at 93.96 against the US dollar.

US Dollar Now Stronger Than Ever

The ongoing US-Iran conflict is proving to be favourable for the US dollar. The USD is currently sitting at 99.92, up 0.27% amid the ongoing war crisis. This development is strengthening the fear of inflation, which may compel the Fed to keep the interest rates hiked. Such a scenario may turn to favor the US dollar the most, propelling the investors to bet on the USD at present.

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