The currency has come under strain amid rising geopolitical tensions that have disrupted energy markets, particularly around the Strait of Hormuz, a key transit route for crude supplies.

Higher oil import costs typically weigh on the rupee by widening India’s trade deficit and increasing dollar outflows.

Dealers said sustained demand for the U.S. dollar from importers, especially oil companies, has kept the rupee under pressure. Concerns over global inflation and tighter financial conditions have also supported the dollar, limiting gains in emerging market currencies.

Market participants pointed to uncertainty stemming from escalating conflict in the Middle East as a key driver behind risk aversion, prompting investors to shift toward safe-haven assets.

Traders said the Reserve Bank of India was likely present in the foreign exchange market to smooth volatility, helping the rupee avoid sharper losses. The central bank typically intervenes to curb excessive fluctuations rather than defend specific levels.

Analysts expect the rupee to remain sensitive to oil price movements and global risk sentiment in the near term, with any further escalation in geopolitical tensions likely to add to downward pressure.

Futures for the GIFT Nifty were trading at 23,257 at 08:11 a.m. IST, indicating that the Nifty 50 would open above Friday’s close of 23,151.10 after posting its steepest weekly drop in years and entering a technical correction.

Supply route developments lift sentimentMarket sentiment improved after the Wall Street Journal reported that the United States was preparing to announce a coalition of countries to escort commercial vessels through the Strait of Hormuz, a maritime corridor that handles about one-fifth of global oil supply.

Additional support came after two India-flagged liquefied petroleum gas carriers Shivalik and Nanda Devi transporting roughly 92,712 metric tons of LPG successfully crossed the strait last week en route to India, easing immediate concerns about fuel supply disruptions.

India’s foreign minister Subrahmanyam Jaishankar said in an interview with the Financial Times published Sunday that he had been in discussions with Iran and that dialogue had produced some results.

However, investors remain cautious as the conflict in the Middle East continues to threaten energy flows and financial markets.

Oil and currency pressures persist as rude oil prices have stayed above $100 per barrel during the conflict, raising concerns about inflation and economic growth in India

.The surge in energy costs has also pushed the Indian Rupee to record lows against the U.S. dollar, highlighting the vulnerability of the country’s energy-dependent economy.

Traffic through the Strait of Hormuz has been heavily curtailed since the United States and Israel launched a bombing campaign on Iran at the end of February, prompting Tehran to largely halt commercial shipping through the critical waterway.

The referendum comes as the resource-rich country faces persistent economic pressure, including high inflation and recent tax increases, while navigating complex geopolitical ties with major powers including Russia, the United States and China.

Tokayev, a career diplomat who assumed the presidency in 2019, has described the proposed constitution as “a truly historic moment” that would move Kazakhstan away from what he calls a “super-presidential” system toward greater separation of powers between branches of government.

Critics, however, say elements of the reform could effectively consolidate authority within the presidency and potentially allow Tokayev to extend his political influence beyond the current constitutional limit.

Political analysts say the debate over the reforms reflects broader questions about Kazakhstan’s governance model as the country seeks to balance stability with institutional reform.

The referendum is also taking place amid speculation about Tokayev’s long-term political plans.According to a diplomatic source cited by analysts, Tokayev has been discussed as a potential candidate for the role of secretary-general of the United Nations later this year.

Political analyst Andrei Satpayev said the constitutional changes could create a vice-presidential post that might allow Tokayev to designate a successor before leaving office early if he were to pursue an international position.

Kazakhstan, a major producer of oil, uranium and other minerals, has faced economic challenges in recent months, including rising consumer prices and tax increases that have weighed on households and businesses.

The outcome of the referendum could shape the country’s political structure as it manages those pressures while maintaining its role as a key economic and energy hub in Central Asia.

Georgieva delivered the remarks at a symposium hosted by Japan Ministry of Finance in Tokyo, where she said the conflict was once again testing the resilience of the global economy.

Georgieva said higher energy costs triggered by the regional conflict could have broad economic implications if oil prices remain elevated for an extended period.

According to her estimate, a persistent 10% rise in oil prices would translate into roughly a 0.4 percentage point increase in global inflation.Her comments underscore concerns among policymakers that geopolitical tensions in the Middle East could disrupt energy markets and complicate efforts by central banks to bring inflation under control.

Addressing officials and economists at the Tokyo symposium, Georgieva urged governments and central banks to prepare for heightened uncertainty in the global economy.

“My advice to policymakers in this new global environment is think of the unthinkable and prepare for it,” she said, referring to the potential economic shocks stemming from geopolitical instability.

Georgieva added that the latest Middle East conflict was placing additional strain on an already fragile global recovery, highlighting the need for policymakers to remain vigilant as risks to growth and price stability evolve.