AFP, Mumbai

India’s rupee fell to a record low of more than 95 to the dollar on Monday, before recovering, despite recent efforts by the central bank to stem its fall.

The rupee was among Asia’s worst forex performers in 2025, and its underperformance has continued well into this year, hitting new lows on a regular basis.

Experts say the Middle East war has piled more pressure on the currency, as overseas investors offload Indian shares, and as concerns grow over India’s rising energy import bill and the possibility of a wider current account deficit.

On Monday afternoon, the rupee hit 95.21, down 0.3 percent from Friday’s close, before recovering later to 94.83.

The world’s most populous nation is one of the “most vulnerable economies within Asia to an energy price shock”, analysts at Nomura wrote in a note on Monday.

This has partly caused overseas investors to sell around $12 billion in Indian equities in March so far.

“Foreign outflows from Indian equities could intensify, if the Middle East conflict tightens global financial conditions significantly,” Nomura analysts added.

More significantly, the rupee’s drop comes despite recent interventions by the Reserve Bank of India (RBI) to stem the fall, including via aggressive dollar sales.

On Friday, the RBI clamped down on speculation in the foreign exchange market by limiting to $100 million the daily currency positions that lenders can have.

“By capping onshore exposure, the RBI forces unwind ... long-dollar positions, draining speculative fuel from the market,” Raj Gaikar of SAMCO Securities told AFP.