The Indian rupee sank to a record low of almost 77 against the U.S. dollar as the deepening Russia-Ukraine conflict sent crude oil prices soaring to 14-year highs prompting safe-haven flows into the dollar. 
The rupee closed trading on Monday at 76.93, 76 paise weaker than its previous close..
“The parabolic rise in crude oil prices towards multi-year highs and spiralling commodity prices are fuelling inflationary risks, which is a key headwind for the rupee-dollar exchange rate,” said .Sugandha Sachdeva, Vice President – Commodity and Currency Research, Religare Broking Ltd. “Significant outflows from the domestic equities, tracking global cues are also weighing on the domestic currency,” she added.
“We are in an environment of geopolitical uncertainty and Russian oil is virtually blocked amid the existing economic sanctions on Russia. There isn’t enough oil supply to meet the demand of almost 99 million barrels per day. This is likely to act as a catalyst for fuelling further inflationary pressures, with significant ramifications” for economic growth, Ms. Sachdeva observed.
Citing India’s significant buffer of foreign exchange reserves as providing some cushion, she said the RBI was also likely to intervene in the markets to curb excessive volatility. 
“However, the overall trend for the Indian rupee is skewed on the downside and a convincing close below the 77 mark would pave the way for further downside towards 77.50 mark in near term, while we envisage the local currency to test the 79 mark from a medium-term perspective,” she added.

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