The Indian rupee was pinned near its all-time low on Monday, averting losses largely on the back of likely central bank intervention, via state-run banks, as hostilities in the Gulf kept oil prices elevated. The rupee closed at 92.42 per dollar, nearly flat on Monday,and in touching distance of its all-time low of 92.4750 hit last week.
Brent crude oil futures rose over 1% to $104.5 per barrel, with the situation in the Strait of Hormuz remaining a major focus area for investors. U.S. President Donald Trump’s demands for a coalition to help reopen the key energy artery appeared to have met little success, as allies Japan and Australia said they were not planning on sending naval vessels.
“In FX, the reaction is largely being driven by moves in oil prices wherein traders are identifying which economies are more at risk and positioning accordingly,” a trader at a Singapore-based hedge fund said. India’s external balance and government finances could be hit if oil prices stay high for an extended period, economists have said. “The surge in oil prices since late February constitutes a significant terms-of-trade shock for the INR, especially at a time when its non-oil trade deficit is also large,” analysts at HSBC said in a Monday note. Oil prices have risen over 40% since the war broke out.
HSBC has revised its rupee forecast lower to 92 by end-March compared with 88 earlier. India’s merchandise trade deficit narrowed month-on-month in February, per data released on Monday, but officials have warned that the escalating crisis around the Strait of Hormuz could stall key shipments and raise costs for the energy-importing country. In global markets, the dollar index was a tad lower at 100.2 while Asian currencies traded mixed as investors also kept an eye on a string of central bank policy decisions due this week.
Published on March 16, 2026
