The Indian rupee depreciated by 32 paise to touch an all-time low of 95.20 against the US dollar in early trade on Thursday, pressured by soaring Brent crude oil prices near $122 per barrel and continued strength in the American currency. 

According to forex traders, the USD/INR pair may weaken further, as rising crude prices are expected to significantly increase India’s import bill. Concerns over a potential wider conflict in West Asia have also added to investor nervousness. 

The US dollar extended gains after the US Federal Reserve kept interest rates unchanged. Safe-haven demand for the greenback was further supported by fresh diplomatic tensions between Washington and Tehran. 

At the interbank foreign exchange market, the rupee opened at 95.01 per dollar before slipping further to a record low of 95.20, marking a decline of 32 paise from its previous close. 

On Wednesday, the rupee had already weakened by 20 paise to close at a then-record low of 94.88 against the US dollar. 

Meanwhile, the dollar index, which measures the greenback against a basket of six major currencies, was trading marginally higher by 0.01% at 98.96. 

Brent crude, the global oil benchmark, rose 3.16% to $121.76 per barrel in futures trade. 

Oil prices rose further after posting their highest close in nearly four years, as the US intensified pressure on Iran by signalling no easing of its naval blockade and pursuing the forfeiture of seized tankers linked to the Islamic Republic. 

The Strait of Hormuz has remained effectively closed since the conflict began at the end of February, severely disrupting the flow of crude oil, natural gas and refined petroleum products, and pushing global energy prices higher. 

On the domestic equity front, benchmark indices opened sharply lower. The Sensex plunged 821.79 points to 76,674.57 while the Nifty dropped 287.3 points to 23,890.35 in early trade. 

Foreign Institutional Investors (FIIs) sold equities worth Rs 2,468.42 crore on Wednesday, according to exchange data.