New Delhi: During the recent US-Iran conflict, concerns grew that the Indian rupee could weaken sharply against the US dollar, with some analysts warning that the exchange rate could touch the ₹100 mark if crude oil prices continued to surge and disruptions in the Middle East intensified.
India, which imports nearly 85% of its crude oil requirements, was expected to face significant pressure as rising oil prices increase the country’s import bill and demand for US dollars. The possibility of disruptions in the Strait of Hormuz one of the world’s busiest oil shipping routes also raised fears of a prolonged energy crisis.
However, the rupee did not experience the extreme depreciation that many had feared. Economists say this was because the currency’s performance depends on several factors, not crude oil prices alone.
According to market analysts, India’s economic resilience was supported by diversified crude oil sourcing, adequate foreign exchange reserves, timely intervention by the Reserve Bank of India (RBI), and continued capital inflows. These measures helped contain volatility in the foreign exchange market and ensured sufficient dollar liquidity despite global uncertainty.
The RBI also took steps to improve the availability of US dollars in the financial system and intervened in the currency market when necessary to prevent excessive fluctuations. Lower oil prices following signs of easing geopolitical tensions further reduced pressure on the rupee.
Although India’s state owned oil marketing companies reported substantial losses during the period due to elevated crude prices, the country avoided a major fuel supply disruption and maintained adequate energy availability through diversified imports and policy support.
Economists note that while some forecasts suggested the rupee could eventually approach ₹100 per US dollar if the conflict escalated significantly, these were risk scenarios rather than certain outcomes. The currency’s movement ultimately reflected a combination of global oil prices, foreign investment flows, central bank actions and overall market sentiment.
The episode has highlighted the importance of long term economic preparedness. Strong foreign exchange reserves, diversified energy imports and prudent macroeconomic management enabled India to absorb external shocks more effectively than many had anticipated.
While challenges remain for the Indian economy amid global uncertainty, policymakers and economists agree that resilience built over time played a key role in preventing a sharper depreciation of the rupee during one of the most volatile geopolitical periods in recent months.
