Indian rupee is expected to remain volatile throughout March as geopolitical tensions and global economic factors continue to exert pressure on the currency, according to a report by Union Bank of India.
The report noted that the Indian Rupee (INR) recently touched a historic low of ₹92.48 per dollar on March 13, reflecting the impact of both global and domestic developments on the currency market.
According to the report, geopolitical tensions in the Middle East remain a key risk for the rupee’s outlook. The escalating conflict in the region has raised concerns over possible disruptions to global energy supply routes, which has pushed crude oil prices higher.
It stated “Indian Rupee (INR) is expected to remain volatile through March after touching a historic low”.India, being a major oil importer, remains vulnerable to such price shocks.
Higher crude prices can widen the country’s trade deficit and current account deficit while also increasing the demand for dollars from oil marketing companies.
The report further highlighted that capital flows will remain another crucial factor influencing the rupee’s movement.
Sustained portfolio outflows or a prolonged risk-off environment in global financial markets could further weigh on the currency.
According to the report, the trajectory of the rupee during March will largely depend on a combination of factors including global dollar strength, developments in Middle East geopolitics, crude oil price trends, and the direction of foreign portfolio investor (FPI) flows.
While near-term pressures may keep the rupee biased toward weakness, the report added that India’s strong foreign exchange buffers are expected to prevent any sharp or disorderly depreciation in the currency.
In the near term, the rupee has remained range-bound, with exporters selling dollars at elevated levels. This has helped limit a sharper fall in the currency.
The report also noted that the spike in geopolitical tensions and oil prices could have implications for India’s external balances.If average oil prices settle higher at around USD 85 per barrel, the report estimated that India’s current account deficit could widen beyond 2 per cent of GDP in FY27.
In comparison, during the current fiscal year the current account deficit is tracking at below 1 per cent of GDP.
However, the report warned that the month of March could still affect the current account arithmetic due to the sharp increase in oil prices and war-led disruptions in global trade.
Published on March 14, 2026
