Indian Rupee Hits 3-Month Low as Oil Prices Spike on Middle East Tensions

Indian Rupee Hits 3-Month Low as Oil Prices Spike on Middle East Tensions

Published: June 19, 2025 | 🖊️ Tredu FX Desk

INR Weakens for Third Straight Session

The Indian Rupee (INR) fell for the third consecutive day on Wednesday, hitting its lowest level since mid-March, as geopolitical tensions in the Middle East intensified. The USD/INR pair traded around ₹86.71, after peaking at ₹86.89 earlier during European trading hours.

Middle East Conflict Fuels Oil Rally

The ongoing Iran–Israel conflict, now in its seventh day, has pushed Brent and WTI crude oil prices up by over 20% this month. With India being a major oil importer, this spike in crude is weighing on the Rupee, increasing the nation’s import bill and widening trade deficits.

Global Market Tensions Compound INR Losses

Although the US Dollar Index (DXY) is flat around 98.95, the US Dollar remains firm, supported by the Federal Reserve’s decision to hold interest rates steady, and by safe-haven flows amid mounting geopolitical uncertainty.

US markets remain closed on Thursday for Juneteenth, keeping overall forex trading volume subdued. More volatility is expected when liquidity returns on Friday.

US Political Backing for Israel Escalates Risks

Statements from President Donald Trump have stirred further uncertainty. He has praised Israeli airstrikes and issued vague threats to Iran, saying, "I may do it. I may not. I mean, nobody knows what I am going to do." The US has also bolstered military presence in the region, increasing fears of broader involvement.

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• Crude Oil Market Updates
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