News

Rupee falls 27 paise against dollar amid escalating Middle East tensionsThe Indian rupee fell to 91.25 against the US dollar after US and Israel air strikes on Iran killed Ayatollah Ali Khamenei, spiking oil prices and prompting Iran to close the Strait of Hormuz.By Anshul  March 2, 2026, 9:35:22 AM IST (Published)2 Min ReadThe Indian rupee weakened by 27 paise at the open on Monday (March 2) to 91.25 against the US dollar, tracking broad risk aversion in global markets after escalating geopolitical tensions in the Middle East.

The currency came under pressure after the United States and Israel carried out air strikes on Iran over the weekend, raising the risk of a prolonged regional conflict and triggering a sharp rise in crude oil prices.

The strikes reportedly resulted in the death of Iran’s Supreme Leader Ayatollah Ali Khamenei, prompting Iran to launch missile barrages across the region in retaliation.

US President Donald Trump told the Daily Mail that the conflict could extend for another four weeks and said on social media that attacks would continue until US objectives were achieved.

The escalation drove investors towards safe-haven assets such as gold and pushed oil prices to their highest levels in more than a year. Iran said it had closed navigation through the Strait of Hormuz, a key oil export route that handles about one-fifth of global oil consumption, adding to supply concerns.

Higher oil prices are seen as negative for oil-importing economies such as India. “If meaningful oil price increases are sustained, we think the likes of KRW, INR, and to some extent PHP are more vulnerable given their linkages to oil imports,” Michael Wan, senior currency analyst at MUFG, said in a note.

Asian currencies declined between 0.2% and 0.6% on Monday (March 2), while MSCI’s gauge of Asia-Pacific equities fell 1.5%.

The dollar index was down 0.2% at 97.9.

Market participants expect the Reserve Bank of India to step in to prevent excessive volatility if the rupee weakens further. The domestic currency had touched an all-time low of 91.9875 against the dollar earlier this year.

-With agencies inputs

Catch LIVE updates on markets hereContinue ReadingTagsDollarIranrupeeUs-iran tensions