Indian Rupee Records Steepest Weekly Drop in Three Years Amid Iran Conflict Fears

Key Facts

The Indian rupee has recorded its most significant weekly depreciation in over three years, driven by escalating geopolitical tensions in the Middle East. According to the latest Reserve Bank of India (RBI) bulletin, the rupee's 40-currency real effective exchange rate (REER) has dropped to 92.72. This reading is significantly below its long-term average of 98.25, indicating that the currency is currently deeply undervalued. The heightened geopolitical risk has triggered intense pressure on the INR, as investors pivot toward safe-haven assets. Analysts remain focused on India's sensitivity to energy price fluctuations and potential supply disruptions. This multi-year record drop reflects the currency's vulnerability to regional instability and shifting investor sentiment. As uncertainty persists, the market is closely monitoring whether the RBI will intervene to stabilize the currency's valuation.

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