Rupee began the week on a red note, tumbling to its record low, close to the 94 against US dollar mark. The currency dropped 41 paise to hit a record low of 93.94 against the US dollar, slipping past its previous trough of 93.7350 recorded on Friday.

The fall comes as boiling tensions in the Middle East have fueled fears of prolonged disruption to energy supplies, dragging down the currency.Weakness was visible across the region, with Asian currencies declining between 0.1% and 0.8% after hopes of easing hostilities faded over the weekend, Reuters reported. The conflict has now entered its fourth week, with Donald Trump and Tehran continuing to exchange threats.

A sharp rise in crude oil prices has added to the pressure, with rates surging more than 50% this month. The International Energy Agency has flagged the current situation as more severe than the oil shocks of the 1970s combined.

Dalal Street also reflected the strain with Nifty50 plunging below the 23,000 mark, and BSE Sensex down over 1,300 points. At 9:17 AM, the Nifty50 stood at 22,698.55, down 416 points or 1.80 per cent, while the Sensex was at 73,168.18, lower by 1,365 points or 1.83 per cent.

Since the conflict began, rupee, seen as particularly vulnerable to rising oil prices, has depreciated nearly 3%.According to Reuters, BofA Global Research projects rupee to reach 94 by June 2026, compared with its earlier estimate of 89, assuming the crisis eases in the coming weeks.

Persistent foreign fund outflows have further weighed on the currency, with more than Rs 1 lakh crore pulled out since the beginning of 2026.