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Rupee Depreciation: Why Rupee Hit Record Low Against US Dollar and Its Impact for UPSC

Context

The rupee hit a fresh record low of ₹92.3 per U.S. dollar, amid West Asia tensions and rising crude prices linked to concerns over the Strait of Hormuz.

Reasons for Rupee Depreciation

  • Rising crude oil prices
    • Brent near $102/bbl
    • WTI above $97/bbl
    • Increased India’s import bill and dollar demand.
  • Geopolitical tensions
    • West Asia conflict
    • Hormuz-related uncertainty affecting global markets.
  • Higher domestic dollar demand
    • Oil companies and importers seeking dollars for payments.
  • Capital market pressures
    • Weak equity sentiment (Nifty fall)
    • Capital outflows.
  • Global risk aversion
    • Safe-haven shift toward the U.S. dollar strengthened it globally.
WhatsApp Image 2026 03 14 at 11.55.40 AM
WhatsApp Image 2026 03 14 at 11.55.41 AM 1
PYQ – 2019, Ans – D
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Rupee Depreciation: Why Rupee Hit Record Low Against US Dollar and Its Impact for UPSC

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