MUMBAI — The Indian rupee experienced a significant sell-off on Wednesday morning, March 4, 2026, sliding 69 paise to reach an unprecedented all-time low of 92.18 against the US dollar. The sharp decline was primarily driven by a dramatic spike in global crude oil prices and deteriorating investor sentiment as the military conflict between the United States and Iran continues to escalate.
Market analysts noted that the domestic currency faced intense pressure immediately upon the reopening of the forex market, which had been closed on Tuesday for the Holi holiday. The rupee opened at 92.05 before quickly descending to its early low of 92.18, a steep drop from its previous close of 91.49 on Monday. The primary catalyst for this volatility is the surge in Brent crude, the global benchmark, which climbed over 1 per cent to exceed $82.22 per barrel. As India imports approximately 85 per cent of its fuel requirements, the rising cost of energy poses a direct threat to the country’s trade balance and inflation outlook.
The carnage was not limited to the currency market, as the domestic equity indices also witnessed a massive rout. In early trade, the BSE Sensex plummeted by 1,671.39 points, or 2.08 per cent, to 78,567.46, while the NSE Nifty tanked 502.35 points to 24,363.35. The aggressive withdrawal of foreign capital has further strained the markets, with Foreign Institutional Investors (FIIs) offloading equities worth over ₹3,295 crore on Monday alone.
Financial experts suggest that investors are rapidly shifting toward safe-haven assets like the US dollar and gold as uncertainty looms over the duration and severity of the West Asia crisis. With the US Dollar Index gauging the greenback’s strength at 99.08, the rupee remains vulnerable to further depreciation. If crude prices remain elevated or the Strait of Hormuz experiences prolonged disruptions, economists warn that India’s import bill could swell significantly, potentially impacting the broader economic growth trajectory for the current fiscal year.
