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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%.
