Iran war spotlights rupee's vulnerability

The rupee is down about 1.5% since the war began, hitting a record low of 92.4750 versus the US dollar last week. In that time, the yuan has slipped 0.2% and the Singapore dollar dipped 0.8%

- REUTERS

Dark clouds over the rupee’s outlook are prompting banks to pitch cross-currency trades targeting its underperformance against certain Asian peers, highlighting how the Iran war-sparked oil surge may create uneven outcomes.

Barclays Bank is recommending positioning for rupee weakness against the Chinese yuan, while HSBC is backing the Singapore dollar.

India is among the economies most sensitive to rising oil prices. Brent crude is up nearly 40% since the conflict in the Middle East began, threatening India's external balances and weighing on its inflation-growth balance.