Rupee tumbles to record low of 96.90 vs USD as US-Iran stalemate stokes global inflation fears

The rupee fell to a record low on Wednesday as a deadlock in U.S.-Iran peace talks kept oil prices elevated, ‌fuelling ⁠worries ⁠of a global inflation surge that has lifted bond yields to multi-year highs and weighed on equities.

Elevated energy prices and weak capital flows, further strained by ⁠rising bond ‌yields, have left India staring at a steep ⁠balance of payments deficit for the ongoing fiscal year.

The rupee fell to 96.90 per dollar on Wednesday, eclipsing its previous all-time low of 96.6150 hit in the previous ‌session. The currency is down 6% since the Iran war began ⁠in late February.

Overseas investors have pulled out over $22 billion from local stocks and bonds over the same period, while Brent crude prices have surged over 50%.