The Indian rupee came under intense pressure on Monday morning, tumbling sharply against the US dollar as global markets reacted to fresh tensions in West Asia after Donald Trump rejected Iran’s latest response to Washington’s ceasefire proposal.
The domestic currency weakened by 139 paise in early trading, slipping to 94.90 against the dollar after opening at 94.97 in the interbank foreign exchange market. The steep decline erased the gains recorded on Friday, when the rupee had strengthened by 71 paise to close at 93.51.
Currency traders attributed the selloff to surging crude oil prices, heavy foreign investor outflows, and renewed strength in the US dollar. Markets turned risk averse after signs emerged that negotiations between the United States and Iran had once again stalled.
Iran reportedly conveyed its response to the latest American proposal through Pakistani mediators, seeking discussions centred on a permanent end to the conflict. Trump, however, dismissed the proposal as unacceptable, while calls for tougher military action also gained traction within sections of the Republican leadership.
Analysts noted that fears of prolonged instability in the region drove oil prices sharply higher, adding to pressure on import dependent economies such as India. Continued military activity involving Israel, Hezbollah, Iran, and the United Arab Emirates further unsettled investors.
Brent crude prices jumped more than four percent to around 105.5 dollars per barrel in futures trade, while the dollar index strengthened against major global currencies.
The turbulence also spilled into Indian equity markets. The Sensex dropped more than 800 points during early trade, while the Nifty slipped below the 24,000 mark as investors moved away from riskier assets.
Foreign institutional investors continued their selling spree, offloading Indian equities worth over ₹4,110 crore on Friday, according to exchange data.
At the same time, India’s foreign exchange reserves also declined significantly. Latest figures released by the Reserve Bank of India showed reserves falling by 7.794 billion dollars to 690.693 billion dollars during the week ending May 1, extending losses seen in the previous reporting period.
