Money Market | Business Upturn

RBI dusting off its 2013 taper tantrum playbook: rate hike, NRI bonds and dollar swaps all on the table

Aditya Bhagchandani — Fri, 22 May 2026 04:55:26 +0000

The Reserve Bank of India is considering its most comprehensive battery of rupee defence measures since the 2013 taper tantrum. Governor Sanjay Malhotra and senior officials have held multiple internal meetings to evaluate options including an out-of-cycle interest rate hike, additional dollar-rupee currency swaps, NRI foreign currency deposit schemes, and sovereign foreign currency bonds, according to Bloomberg.

The rupee has been trading at approximately ₹96.21 to ₹96.57 per dollar in recent sessions after hitting record lows near ₹97 earlier this week. The currency has depreciated roughly 7 to 11% year-to-date, its steepest annual fall since 2013. Foreign exchange reserves have fallen from peaks near $725 billion to approximately $696.99 billion as of mid-May, as the RBI has spent down its buffer defending the currency.

Why 2013 is the relevant parallel

The 2013 taper tantrum was triggered by the US Federal Reserve’s signal that it would begin tapering its bond-buying programme, sending the rupee from approximately ₹54 to ₹69 against the dollar in a matter of months. The RBI’s response that year became a case study in emerging market currency crisis management: emergency NRI deposit schemes that raised $30 billion, aggressive liquidity tightening, spot dollar intervention, and curbs on speculative foreign exchange positions.

The current situation has structural similarities. A sharp external shock, first the Fed taper signal in 2013 and now the Iran war oil shock in 2026, is simultaneously widening India’s current account deficit, triggering FII outflows, and putting downward pressure on the rupee. The policy toolkit available is largely the same. The key differences are that India enters this crisis with significantly stronger reserves at $697 billion versus far lower levels in 2013, along with better corporate balance sheets and more diversified growth drivers.

The full toolkit under consideration

An interest rate hike is the most consequential option and the one that would send the clearest signal to global investors. The repo rate currently stands at 5.25%, held steady at the April 2026 MPC meeting. An out-of-cycle hike before the next scheduled MPC meeting on June 3 to 5 would be a significant policy reversal given that the RBI had been on an easing bias, but would directly address rupee weakness by widening the interest rate differential with the US. The June MPC meeting is now the most watched policy event in Indian financial markets.

An NRI deposit scheme, potentially mobilising up to $50 billion compared to $30 billion in 2013, is the most direct mechanism for bringing dollar inflows into the system. The mechanics are simple: NRIs are offered attractive, above-market interest rates on fixed-term dollar deposits, generating immediate forex inflows. The 2013 scheme worked. At current US interest rates of 3.75%, however, offering competitive NRI deposit rates is significantly more expensive than it was in 2013, a cost the RBI must weigh against the forex benefit.

The $5 billion USD-INR swap auction already announced for May 26 is the least disruptive tool. It injects rupee liquidity while temporarily absorbing dollars, buying time without making a permanent policy commitment. Sovereign or state-owned lender foreign currency bonds represent another inflow mechanism, though one that adds to the government’s foreign currency liability.

Spot dollar sales, net open position limits for banks, and offshore non-deliverable forward market restrictions have already been partially deployed. Governor Malhotra has emphasised orderly depreciation rather than a specific target. The RBI is managing the pace of decline rather than defending a level, a stance that preserves optionality while conserving reserves.

What the June MPC will decide

The June 3 to 5 MPC meeting is the most important policy event for the rupee in the near term. Markets are watching for three possible signals: a rate hike to defend the currency and contain imported inflation; explicit guidance on additional forex intervention tools; or a hold with updated inflation and growth projections that reflect the oil shock’s macro impact.

A rate hike at this meeting would mark the clearest signal yet that the RBI has concluded the currency risk outweighs the growth risk. It would indicate that the cost of allowing further depreciation to inflation expectations, corporate import costs, and financial market stability is greater than the cost of tighter domestic monetary conditions.

The next few days before the MPC will be watched for any emergency announcement, and for whether the US-Iran deal reports that pushed crude lower this week hold, potentially relieving some of the pressure that has made this entire discussion necessary.

This article is for informational purposes only and does not constitute investment advice. Please consult a qualified financial advisor before making any investment decisions.

India bond yields jump sharply as rate hike bets intensify; 364-day T-bill yield sees biggest auction spike in 4 years

Aditya Bhagchandani — Thu, 21 May 2026 05:17:28 +0000

Indian government bond yields reversed earlier gains and moved sharply higher on Thursday, May 21, as markets aggressively priced in future interest rate hikes amid rising fuel prices, inflation concerns, and persistent pressure on the rupee.

The 364-day Treasury bill yield jumped 21 basis points to 5.975%, marking the biggest jump in auction yields in nearly four years.

Meanwhile, India’s benchmark 10-year government bond yield climbed back toward the 7.14% mark, its highest level since May 2024, after earlier easing to around 7.03% during the session on softer crude oil prices and lower US Treasury yields.

Earlier in the day, Indian bonds had gained after Brent crude oil prices corrected sharply and US 10-year Treasury yields slipped below 4.60%, improving risk sentiment globally. The benchmark 10-year Indian bond yield had fallen nearly 5 basis points amid expectations that easing oil prices could reduce inflationary pressure.

However, sentiment later reversed sharply as markets focused on mounting expectations of aggressive monetary tightening.

Traders are now pricing in nearly 125 basis points of future rate hikes through the overnight indexed swap (OIS) curve, reflecting rising concerns over inflation, fuel prices, and rupee weakness.

The move comes after fuel prices reportedly increased by nearly ₹4 per litre since May 15 following the spike in global crude oil prices linked to tensions in West Asia and disruptions around the Strait of Hormuz.

Rising oil prices have intensified fears of imported inflation in India, particularly as the rupee continues to trade near record lows against the US dollar.

Market participants also noted that companies are increasingly shifting toward floating-rate debt structures as expectations of higher interest rates continue to build.

The sharp repricing in Indian debt markets mirrors moves seen globally, where bond yields have surged amid fears that elevated energy prices could force central banks to maintain tighter monetary policy for longer.

The Reserve Bank of India (RBI) has already announced a $5 billion dollar/rupee buy-sell swap auction scheduled for May 26 as part of ongoing liquidity and currency management measures.

Investors will continue to track crude oil prices, RBI policy signals, rupee movement, and global bond market trends for further direction in domestic debt markets.

Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Bond markets are subject to interest rate risks, liquidity conditions, and global macroeconomic developments.

RBI weighing rate hike and overseas bond sale to save the rupee — here’s how close India is to a currency crisis

Aditya Bhagchandani — Thu, 21 May 2026 03:56:17 +0000

The Reserve Bank of India is actively considering its full toolkit to arrest the rupee’s slide — including an interest rate hike, additional currency swaps, and raising dollars from overseas investors — as Governor Sanjay Malhotra and top officials hold a series of internal meetings to decide how far the central bank is willing to go to defend the currency, according to Bloomberg.

The rupee recovered on Thursday morning, May 21, trading around ₹96.20 per dollar in early interbank trade after settling at a record low of ₹96.82 on Wednesday — its worst closing level ever. Traders attributed the recovery to RBI dollar-selling intervention rather than any fundamental shift in the macro picture. USDINR futures were trading near ₹96.59 on Thursday morning.

What the RBI is considering

Three instruments are reportedly on the table in internal discussions, each with materially different implications for the economy.

A rate hike would be the most significant and consequential option. The RBI had pivoted to an easing cycle earlier this year, cutting the repo rate as growth concerns mounted. Reversing that pivot — raising rates to defend the rupee by widening the interest rate differential with the US — would signal that the currency crisis is severe enough to override the domestic growth agenda. It would raise borrowing costs for Indian businesses and consumers at precisely the moment the economy is absorbing elevated fuel prices. It would also send a message to foreign investors that India is willing to prioritise currency stability over growth — a message that could attract bond inflows but would compress equity valuations.

Additional currency swaps build on the $5 billion swap auction already announced for May 26. Swaps inject rupee liquidity while absorbing dollars — a tool that addresses the domestic liquidity squeeze created by the RBI’s own foreign exchange market intervention without the permanence of a rate move. The limitation is that swaps are reversible and do not change the fundamental dollar demand-supply imbalance.

Overseas dollar bonds — a sovereign or quasi-sovereign fundraise from non-resident investors — would directly augment foreign exchange reserves. India last used this mechanism in 2013, when the RBI raised $30 billion through NRI deposit schemes at around 3.5% during the taper tantrum. That option is significantly more expensive now, with the Federal Reserve’s target rate at 3.75% and global hedging costs elevated. The cost-benefit calculation is marginal at best, but if reserves continue falling — already down approximately $32 billion since the war began — it may become necessary regardless of cost.

Why the rupee keeps falling

The rupee has been under pressure for nine consecutive sessions, driven by a structural current account problem that no amount of intervention can permanently resolve. India imports approximately 85% of its crude oil requirements. A 50% surge in oil prices since the Iran war began means the dollar outflow for oil imports has expanded dramatically — widening the current account deficit, increasing corporate dollar demand for import payments, and triggering FII outflows from equity and debt markets as global risk appetite contracts.

Every dollar the RBI sells to defend the rupee reduces the foreign exchange buffer available for future intervention. With reserves already down $32 billion, the RBI is spending finite resources to fight an infinite macro headwind — a position that is sustainable only if oil prices fall, the Iran situation resolves, or foreign capital inflows offset the outflows.

Wednesday’s crude oil crash of over 6% — driven by reports that a US-Iran deal may be hours away — provided exactly the kind of external relief the RBI cannot manufacture domestically. The rupee’s Thursday recovery of approximately 60 paise from its record low is partly a function of that oil price move rather than purely RBI action.

The rate hike dilemma

An interest rate hike in this environment would be a significant reversal. The RBI had been moving toward accommodation as Indian growth faced headwinds from global uncertainty. Tightening now would add another headwind — higher EMIs for households, higher borrowing costs for businesses, and reduced credit growth — at a time when the economy is already absorbing the inflationary shock of higher fuel and commodity prices.

The case for a hike rests on one argument: that a credible signal of monetary tightening would slow rupee depreciation by making rupee assets more attractive to foreign investors, reducing the pressure on the central bank to intervene using reserves. The case against is that the rupee’s weakness is driven by a current account shock — not by monetary conditions — and that a rate hike addresses the symptom while making the disease worse by slowing the domestic economy further.

What Thursday’s recovery means

The morning recovery to ₹96.20 from ₹96.82 is meaningful but fragile. It reflects RBI intervention and an improved oil price outlook — neither of which has permanently resolved the underlying pressure. If the US-Iran deal does not materialise, oil prices recover their losses, and FII outflows continue, the rupee will test fresh lows again within days.

The RBI’s willingness to consider all options — including the politically and economically costly option of a rate hike — signals that the Governor and his team view the currency situation as serious enough to warrant tools they have not used in this cycle. Whether those tools are deployed depends on whether the external environment provides any relief in the days ahead.

This article is for informational purposes only and does not constitute investment advice. Please consult a qualified financial advisor before making any investment decisions.

Rupee in focus: India may consider rate hike, other measures to support currency amid record lows

Aditya Bhagchandani — Thu, 21 May 2026 03:50:07 +0000

Fresh discussions around possible policy measures to stabilise the currency, including a potential interest rate hike, according to Bloomberg reporting and recent market developments. Meanwhile, the Indian rupee recovered sharply on Thursday, May 21, after likely intervention by the Reserve Bank of India (RBI) and a correction in crude oil prices helped improve sentiment in the currency market.

The rupee was quoting near 96.75 against the US dollar in early interbank trade before recovering to around 96.20, according to traders cited by Reuters. The domestic currency had settled at a record low of 96.82 on Wednesday after remaining under pressure for nine straight sessions.

Traders said the sharp recovery was likely driven by dollar-selling intervention from the RBI aimed at stabilising the rupee after repeated record lows in recent sessions.

USDINR futures were trading near 96.59 on Thursday morning, up 0.18%.

The rupee has weakened sharply in recent sessions due to elevated crude oil prices, rising US Treasury yields, geopolitical tensions linked to the Iran conflict, and continued pressure on emerging market currencies globally.

As of May 2026, the Reserve Bank of India (RBI) has already deployed several measures to stabilise the currency market. These include aggressive dollar-selling intervention in the forex market, dollar-rupee swap operations, and restrictions on speculative offshore currency positions.

The RBI recently announced a $5 billion dollar/rupee buy-sell swap auction aimed at improving liquidity conditions and reducing volatility in forward premiums.

Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Currency and financial markets are subject to market risks and global developments.

Rupee rebounds from record low as RBI intervention, crude oil correction support currency

Aditya Bhagchandani — Thu, 21 May 2026 03:42:22 +0000

The Indian rupee recovered sharply on Thursday, May 21, after likely intervention by the Reserve Bank of India (RBI) and a correction in crude oil prices helped improve sentiment in the currency market.

Traders said the sharp recovery was likely driven by dollar-selling intervention from the RBI aimed at stabilising the rupee after repeated record lows in recent sessions.

USDINR futures were trading near 96.59 on Thursday morning, up 0.18%.

The rupee also found support after Brent crude oil prices declined sharply. Brent crude dropped 5.6% on Wednesday and hovered near the $105 per barrel mark amid hopes of progress in US-Iran negotiations.

US President Donald Trump said negotiations with Iran were in the final stages while also warning of further attacks if no agreement was reached. Easing oil prices reduced pressure on global bond yields and emerging market currencies.

The benchmark 10-year US Treasury yield also cooled off, falling nearly 10 basis points on Wednesday to below 4.60% after recent concerns that elevated inflation could force the Federal Reserve to keep rates higher for longer.

Currency traders, however, cautioned that the broader trend for the rupee remains weak due to ongoing geopolitical tensions, elevated crude prices and pressure from global interest rates.

The RBI on Wednesday also announced a $5 billion dollar/rupee buy-sell swap auction with a three-year tenor scheduled for May 26. Bankers said the move is expected to help manage liquidity and reduce forward premiums in the currency market.

Despite Thursday’s rebound, the rupee has declined around 2.5% over the last nine sessions and remains one of the weaker-performing Asian currencies amid continued global uncertainty.

Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Currency markets are subject to global market risks and geopolitical developments.

Dollar dips from six-week high on Iran deal hopes; yen nears intervention zone

Aditya Bhagchandani — Wed, 20 May 2026 15:29:02 +0000

The US dollar retreated from a six-week high on Wednesday, May 20, as hopes grew that the United States may be nearing a deal with Iran to end the conflict in the Middle East.

US President Donald Trump said negotiations with Iran were in the final stages, while also warning that further attacks could follow if Tehran does not agree to a deal.

The dollar index, which tracks the greenback against a basket of major currencies, fell 0.12% to 99.19. The euro rose 0.1% to $1.1616, while sterling gained 0.22% to $1.3423. The Australian dollar strengthened 0.52% to $0.7146.

Despite the pullback, the dollar remained supported by rising US Treasury yields and expectations that the Federal Reserve may keep interest rates higher for longer.

The benchmark 10-year US Treasury yield touched a 16-month high on Tuesday, while the 30-year yield rose to its highest level since 2007.

“The increase in the bond yields can be explained by the increase in expectations for the overnight rate at the end of the year,” said Marc Chandler, chief market strategist at Bannockburn Global Forex.

Fed funds futures traders are now pricing in roughly 50% odds of a Federal Reserve rate hike by December, marking a sharp reversal from expectations before the Iran war began, when markets had expected rate cuts this year.

The yen also remained under pressure, with the dollar-yen pair moving close to levels that previously triggered intervention by Japanese authorities. The Japanese yen was last at 158.88 per dollar.

“We’re waiting for the Japanese response. We’re fishing for their pain threshold,” Chandler said.

Currency traders are watching whether Japan may step in again if the yen moves closer to the 160 level. Tokyo had intervened in late April and early May to slow the yen’s decline, although the impact was short-lived.

Christopher Wong, currency strategist at OCBC, said intervention risk could make markets cautious about pushing dollar-yen higher, but added that official action may only slow the move unless US Treasury yields and the broader dollar weaken.

Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Currency markets are subject to global economic, geopolitical and policy risks.

RBI to inject ₹42,000 crore via $5 billion dollar swap on May 26 — what it means for your money

Aditya Bhagchandani — Wed, 20 May 2026 12:26:08 +0000

The Reserve Bank of India announced a $5 billion USD-INR swap auction scheduled for May 26, 2026, in a move designed to inject rupee liquidity into the banking system without cutting the policy rate, as reported by Bloomberg. At current exchange rates, the operation is equivalent to approximately ₹42,000–43,000 crore of rupee liquidity flowing into the system.

How the swap works

The mechanics are straightforward. Banks sell dollars to the RBI and receive rupees in return, with a commitment to reverse the transaction at a future date at a pre-agreed exchange rate. The RBI absorbs the dollars — adding to its foreign exchange reserves — while the banking system receives the rupee equivalent, easing liquidity conditions immediately.

The key distinction from a conventional open market operation is that this is a temporary, self-reversing transaction. The dollars come back to the banks when the swap matures, and the rupees return to the RBI. The net long-term impact on reserves and liquidity is neutral, but the near-term liquidity injection is real and immediate.

Why RBI is doing this now

Banking system liquidity has been under pressure from multiple fronts simultaneously — advance tax outflows, GST payments, and the RBI’s own dollar sales in the foreign exchange market to defend the rupee. Every time the RBI sells dollars to support the rupee, it absorbs an equivalent amount of rupee liquidity from the system — a direct tightening of domestic liquidity that works against the central bank’s easing intentions.

The swap auction solves both sides of this equation simultaneously. The RBI gets dollars it can deploy in the foreign exchange market to manage rupee volatility, while the banking system gets the rupee liquidity it needs to keep credit flowing and overnight rates from spiking. It is a tool that allows the RBI to manage currency and liquidity simultaneously — which is precisely the challenge it faces right now.

What it signals about RBI’s stance

Swap auctions of this scale are used when the RBI wants to ease monetary conditions without the signal of a formal rate cut. The repo rate communicates the RBI’s policy stance publicly and permanently — a cut sends a message about where rates are headed for the foreseeable future. A swap auction is operationally powerful but communicatively neutral. It adds liquidity, reduces the cost of funds for banks at the margin, and supports credit growth — without committing the central bank to a rate trajectory.

The choice of this instrument at this moment signals that the RBI is concerned about liquidity tightness but is not yet ready to signal formal monetary easing — possibly because inflation, driven by elevated oil prices from the Iran conflict, remains uncomfortably above target and a formal rate cut message would be premature.

What it means for markets and borrowers

Improved banking system liquidity typically puts downward pressure on short-term money market rates — commercial paper, certificate of deposit, and overnight call money rates. This passes through gradually to lending rates, particularly for floating-rate borrowers. Home loan and corporate borrowers on MCLR-linked products may see marginal transmission over the next few months if liquidity conditions remain easy.

For equity markets, liquidity injection is broadly positive — easier financial conditions support valuations and reduce the cost of capital for listed companies. For bond markets, the injection reduces the likelihood of a liquidity-driven spike in yields, providing some stability to the government securities curve at a time when fiscal borrowing demand is elevated.

The $5 billion quantum is significant — one of the larger single swap auction announcements in recent RBI history — indicating that the central bank views the current liquidity deficit as meaningful enough to warrant a forceful response.

This article is for informational purposes only and does not constitute investment advice. Please consult a qualified financial advisor before making any investment decisions.

Bond yields at 19-year highs are now the biggest threat to your stock portfolio — what experts say to do

Aditya Bhagchandani — Wed, 20 May 2026 04:53:07 +0000

Global equity markets are facing their most serious macro threat of the year — and it is not coming from earnings, geopolitics, or trade. It is coming from bond markets. Rising yields across the US, Japan, France, and Germany are beginning to do what they always eventually do: make equities look expensive, compress multiples, and punish growth assets. Emerging market strategists are turning cautious, and the advice from the smart money right now is increasingly to wait.

Why bond yields matter more than most investors realise

Inflation is historically the single biggest threat to equity markets — not recessions, not geopolitical shocks, not earnings misses. When inflation moves higher, central banks tighten policy, discount rates rise, earnings growth weakens, and price-to-earnings multiples compress. All four of those things are happening simultaneously right now.

The US 30-year yield is at a 19-year high. Two-year yields, which were around 3.6% at the start of 2026, have climbed to 4.1% — a clear signal that the risk has shifted from Fed easing, which was the market consensus entering this year, to potential tightening. Bond volatility, measured by the MOVE Index, is rising quickly, though not yet at the peaks seen at the start of the Iran war.

The surface looks calm. Underneath, it is not.

Headline indices remain elevated, which is creating a false sense of stability. The equally weighted S&P 500 has not made new highs recently, and the market has narrowed sharply since the Iran war began. The average semiconductor stock is up around 25% — driven by genuinely strong earnings and tight supply — while consumer discretionary stocks are down roughly 13%. That divergence is not a sign of a healthy bull market. It is a sign of investor anxiety being masked by concentration in a handful of high-performing sectors.

Technology earnings have been exceptional this cycle, and supply in semiconductors remains constrained relative to capital expenditure. But most of that good news is already in share prices. The forward-looking question is whether GDP growth downgrades and weaker earnings revisions are coming — and the answer, based on where bond markets are moving, looks increasingly like yes.

The Hormuz factor and what it could mean by summer

The Strait of Hormuz closure is not just an energy story. The longer it remains shut, the more it bleeds into supply chains that have nothing obvious to do with oil. Polyester — derived from petroleum — feeds into textile manufacturing. Plastics feed into consumer goods and industrial production. If the closure extends into the summer months, the risk is rationing, factory shutdowns, and manufacturing disruptions across sectors that markets have not yet priced for this scenario.

The energy-driven inflation this generates forces central banks into an impossible position: raise rates to fight prices, or hold to protect growth. Either choice is bad for equities. Either choice is worse for emerging markets.

What this means for India specifically

India enters this environment with specific vulnerabilities. The current account position is deteriorating as the oil import bill balloons. The rupee is under genuine pressure — not just speculative pressure. And while international investor positioning in Indian equities is already light, providing some technical buffer against a sharp selloff, that buffer does not change the fundamental picture.

The real threat for India may not fully materialise until later in the year. Agricultural prices have not yet fully reflected the Hormuz disruption. Farmers facing higher diesel and fertiliser costs in the kharif season could see margin compression that feeds into rural stress and food inflation — a combination that puts the RBI in an uncomfortable position regardless of what the Fed does.

Attracting foreign capital into India becomes harder as US rates stay elevated. The interest rate differential that India needs to maintain to remain attractive for foreign flows puts upward pressure on domestic borrowing costs at precisely the moment when fiscal spending is rising to cushion the energy shock.

What investors should consider doing now

The strategic advice from experienced emerging market investors right now converges on one point: patience over aggression. Staying in cash — specifically US dollars — until volatility eases is being discussed seriously as a positioning choice, not just a defensive afterthought.

The downside scenario that concerns strategists most is a retest of the late March and early April lows in the US market. If that plays out, it is unlikely that emerging markets, including India, escape the pullback. A 10% correction from recent highs in high-volatility markets is described as relatively modest given the scale of the rallies that preceded it.

The key to watch is not the next earnings release or the next macro data point. It is bond markets. When the MOVE Index peaks and yields stabilise, that will be the signal that the pressure on equities is beginning to lift. Until that happens, the risk-reward for adding equity exposure — particularly in rate-sensitive, growth-dependent markets — is not compelling.

This article is for informational purposes only and does not constitute investment advice. Please consult a qualified financial advisor before making any investment decisions.

India’s 10-year bond yield rises to 7.13% — what’s pushing government borrowing costs up

Aditya Bhagchandani — Wed, 20 May 2026 04:16:24 +0000

India’s 10-year government bond yield climbed to 7.1315% on Wednesday, up from the previous close of 7.1101%, as sovereign debt markets saw mild selling pressure at the open.

What the move means

A rising yield signals falling bond prices — investors are demanding slightly higher returns to hold Indian government paper. The 2.14 basis point uptick, while modest in isolation, reflects the ongoing tension in fixed income markets between easing inflation expectations and the government’s elevated borrowing programme for FY27. Bond yields in India have been sensitive to global cues, particularly US Treasury movements and any shift in the Reserve Bank of India’s rate stance following its recent pivot toward accommodation.

Why it matters for markets and borrowers

The 10-year yield is the benchmark rate against which corporate borrowing costs, home loan rates, and long-duration debt instruments are priced across India. A sustained rise keeps credit conditions tighter for longer, even as the RBI has moved to cut the repo rate. The spread between policy rates and market yields remains a key variable for the transmission of monetary easing into the real economy — and a yield nudging back above 7.13% suggests that transmission is not happening as cleanly as the central bank would prefer.

This article is for informational purposes only and does not constitute investment advice. Please consult a qualified financial advisor before making any investment decisions.

Japan bond yields retreat from record highs after weak 20-year debt auction sparks inflation concerns

Aditya Bhagchandani — Wed, 20 May 2026 04:15:45 +0000

Long term Japanese government bond yields pulled back from multi decade and record highs on Wednesday, although weak demand at a 20 year debt auction highlighted continuing concerns over inflation and rising borrowing costs.

The benchmark 10 year Japanese government bond yield declined 2.5 basis points to 2.775% after rising for seven consecutive sessions and touching a 29 year high on Tuesday.

Japan’s 40 year bond yield, the country’s longest tenure government debt, fell 8 basis points to 4.315% after hitting an all time high in the previous session.

The decline in yields came after recent heavy selling in global bond markets driven by persistent inflation concerns linked to elevated crude oil prices and the ongoing Iran conflict.

Meanwhile, the yield on the 20 year Japanese government bond dropped 5.5 basis points to 3.725%. However, investor demand at the Ministry of Finance auction weakened notably, with the bid to cover ratio falling to 4.01 from 4.82 in the previous auction.

Analysts said inflation concerns and expectations of higher government borrowing continue to pressure Japanese debt markets.

“The sharp rise in the JGB term premium has coincided with an increase in the inflation risk premium,” Barclays analysts Ayao Ehara and Shinichiro Kadota said in a report before the auction.

Japan’s fiscal outlook has also come under focus amid expectations of increased government bond issuance tied to a planned supplementary budget.

Investor attention is also shifting toward the Bank of Japan’s next monetary policy decision. The central bank’s recent hawkish commentary has fuelled speculation of a possible interest rate hike at the June meeting.

Bank of Japan Governor Kazuo Ueda on Tuesday acknowledged the rapid rise in long term interest rates and said the central bank would closely monitor movements in the Japanese government bond market.

Adding to expectations of tighter monetary policy, Japan’s economy expanded at an annualised rate of 2.1% during the first quarter, stronger than market expectations.

Shorter tenure bond yields also continued to rise. The two year Japanese government bond yield climbed 1 basis point to 1.45%, its highest level since May 1995, while the five year yield touched a record high of 2.04%.

Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Market movements are subject to various risks and uncertainties. Readers should conduct their own research before making financial decisions.

Rupee hits fresh record low of 96.91 against US dollar amid oil surge and rising US bond yields

Aditya Bhagchandani — Wed, 20 May 2026 03:59:59 +0000

The Indian rupee weakened to a fresh record low against the US dollar on Wednesday, May 20, pressured by rising US Treasury yields, elevated crude oil prices and persistent geopolitical tensions in West Asia.

The domestic currency opened at a record low of 96.86 against the US dollar and weakened further to 96.91 in early trade.

The rupee has now declined for seven consecutive trading sessions and has touched fresh record lows in six of those sessions. The currency has already weakened 0.6% this week after falling 1.6% last week.

Pressure on the rupee intensified after US bond yields surged amid growing expectations that the US Federal Reserve may keep interest rates elevated for longer or even consider another rate hike later this year.

The benchmark 10 year US Treasury yield has risen more than 20 basis points over the past four sessions, while the 30 year US Treasury yield climbed to its highest level since 2007.

At the same time, Brent crude prices remained near $111 per barrel amid concerns surrounding the Iran conflict and possible supply disruptions in global oil markets.

Higher crude prices remain negative for the Indian rupee as India imports a significant portion of its crude oil requirements. Rising oil prices increase dollar demand from oil marketing companies and also widen the country’s current account deficit.

“The rupee, having largely adjusted to the prospect of persistently high oil prices, now faces a repricing due to the sizeable shift in U.S. rates,” a currency trader at a bank said.

According to Abhishek Bisen, Head of Fixed Income at Kotak Mahindra Asset Management Company, the rupee has weakened nearly 5% since the start of the Iran conflict and around 11% over the past one year.

Bisen said elevated crude oil prices and ongoing geopolitical tensions have weakened investor sentiment and increased dollar demand, making the rupee one of the weaker performing Asian currencies.

Market participants are now closely tracking crude oil prices, geopolitical developments in West Asia and future guidance from the US Federal Reserve for further direction on the rupee.

Rupee crashes to a new all-time low of 96.89 on May 20 — down 6% since the Iran war began and no floor in sight

Aditya Bhagchandani — Wed, 20 May 2026 03:37:33 +0000

The Indian rupee crashed to a fresh all-time low of 96.8900 per US dollar at 9:03 AM IST on May 20, 2026, extending its relentless decline as a deadlock in US-Iran peace talks kept oil prices elevated, global bond yields at multi-year highs, and foreign capital flowing out of Indian markets at a pace not seen since the COVID-era shock of March 2020.

The rupee fell 0.38% or 36.80 paise in early trade, eclipsing the previous all-time low of 96.6150 hit just a day earlier on May 19. The currency has now fallen 6% since the Iran war began in late February 2026 — when it was trading near 87 per dollar — making this the sharpest sustained rupee depreciation episode in at least a decade and the first time the currency has broken through the 96 handle in its history.

The forces driving the collapse

Three interlocking forces are driving the rupee’s record-breaking decline simultaneously, and none of them has a near-term resolution.

The first is crude oil. Brent crude prices have surged over 50% since the Iran war began — from approximately $72-75 per barrel in late February to the current $109-110 range. India imports approximately 88% of its crude oil requirements, making it acutely vulnerable to sustained energy price shocks. Every $10 rise in Brent adds approximately $14-15 billion to India’s annual import bill — a direct and mechanical current account pressure that requires more dollars to be sold in exchange for rupees, weakening the domestic currency. The Strait of Hormuz closure has compounded this by raising insurance and freight costs on all Gulf shipping even for non-oil cargo.

The second is the global bond yield environment. Elevated energy prices have translated into sharply higher inflation in the United States — April US CPI registered its sharpest monthly increase since 2023 — forcing traders to price out any Federal Reserve rate cuts and introduce the possibility of a rate hike before year-end. US 10-year Treasury yields have risen to multi-year highs, making dollar-denominated assets more attractive relative to emerging market assets including Indian bonds and equities. The yield differential between Indian government bonds and US Treasuries — which had been widening in India’s favour — has narrowed sharply, reducing the carry trade incentive that had been supporting rupee inflows.

The third is foreign institutional investor outflows. Overseas investors have pulled out over $22 billion from Indian stocks and bonds since the Iran war began in late February — a sustained and large capital outflow that requires dollars to be purchased and rupees to be sold, directly pressuring the exchange rate. The RBI has been intervening in the forex market to prevent disorderly movement, but its forex reserves — which have declined approximately $37 billion from their peak — are being drawn down at a rate that limits the scale of sustainable intervention.

The balance of payments arithmetic

India is staring at a steep balance of payments deficit for FY27. The current account deficit — which measures the gap between what India earns from the rest of the world and what it pays — is being blown out by the crude import bill surge. The capital account — which measures foreign investment flows — is simultaneously weakening as FII outflows accelerate and new foreign direct investment decisions are delayed by global uncertainty. When both the current account and capital account deteriorate simultaneously, the balance of payments pressure on the currency becomes severe and the RBI’s room to defend a particular level narrows.

The rupee’s 6% decline since late February compares unfavourably with most major emerging market peers — the Brazilian real, South African rand, and Indonesian rupiah have all depreciated less in the same period — reflecting India’s specific vulnerability as one of the world’s largest net crude oil importers at a moment when crude prices are being driven by a conflict it cannot control.

What analysts are watching

CR Forex Advisors MD Amit Pabari, who had flagged the 97 mark as the next technical focus on May 19, is now watching whether the 96.89 level holds or gives way toward 97 and beyond. The technical picture is unambiguous — the rupee is in a confirmed downtrend with no meaningful support until 97 and the 97.50-98 zone beyond. The fundamental picture is equally bearish until either a credible Iran deal is announced and Hormuz reopens — pushing Brent toward $85-90 — or the Federal Reserve signals a pivot that weakens the dollar broadly.

India’s petroleum ministry has confirmed it will continue purchasing Russian crude irrespective of US sanctions waivers — a partial mitigant to the crude import bill through discounted Russian pricing — but Russian crude cannot fully replace Gulf supply at current discount levels, and the transport and insurance cost differentials for Russian crude routed through alternative pathways partially erode the discount advantage.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult a SEBI-registered financial advisor before making investment decisions.

Rupee hit a fresh record low of 96.38 on May 19 — and analysts say 97 could be next if Iran tensions don’t ease

Aditya Bhagchandani — Tue, 19 May 2026 06:41:30 +0000

The Indian rupee opened at a fresh record low of 96.38 against the US dollar on May 19, 2026, depreciating 18 paise from its previous close of 96.20 — which was itself a record low set on Monday — as dollar strength, elevated US Treasury yields, and simmering US-Iran tensions continued to pile pressure on the domestic currency.

At the interbank foreign exchange market, the rupee opened at 96.38, extending a depreciation trajectory that has seen the currency fall from approximately 87 per dollar in early March 2026 — when the West Asia conflict began — to successive record lows through May. The rupee has now broken below the previous all-time low of 95.74 set on May 12, recovered marginally, and is now pushing lower again as the West Asia crisis refuses to resolve cleanly despite diplomatic signals.

What forex traders are watching

CR Forex Advisors Managing Director Amit Pabari said the market’s biggest challenge right now is not just direction but confidence — until there is visible cooling in global tensions and stability in foreign flows, the rupee may continue trading under pressure with volatility staying elevated. Pabari noted that technically, the 94.80-95.10 zone was expected to act as an important support for the USDINR pair, but with no meaningful signs of easing in global risk factors, the pair now appears to be gradually shifting its focus toward the 97 mark — a level that would represent a further 60-65 paise depreciation from the current 96.38.

The dollar index — which gauges the greenback’s strength against a basket of six major currencies — was trading at 99.10, marginally lower by 0.09% despite the dollar’s strength against the rupee, reflecting the Iran tension premium pushing investors toward the dollar as a safe haven even as it pulls back slightly against other developed market currencies.

The crude oil and Hormuz connection

Forex traders specifically flagged two structural vulnerabilities keeping the rupee under pressure. The first is India’s crude oil import bill — Brent crude was trading at approximately $109.96 per barrel in futures trade on May 20, down 1.91% from the previous session but still at levels that are dramatically higher than the $75-80 range India was importing at before the crisis. Every dollar of Brent adds approximately $1.5 billion to India’s annualised crude import bill at current import volumes — a direct and mechanical current account pressure that weakens the rupee.

The second is the Strait of Hormuz closure’s impact on India’s Gulf trade beyond crude oil. India’s exports to Gulf Cooperation Council countries — including merchandise exports, remittances flowing through the Gulf Indian diaspora, and service sector exports — are all affected by the Hormuz disruption. The closure has raised freight costs and insurance premiums on shipping lanes to and from the Gulf, compressing India’s export receipts from one of its most important trade partners at the same moment that import costs are surging.

India’s Russia oil strategy

In a parallel development that provides a partial buffer to the external pressure, a senior petroleum ministry official on Monday confirmed that India has been purchasing Russian crude oil irrespective of US sanctions waivers and will continue to do so based on commercial viability and energy security needs. Joint Secretary Sujata Sharma told reporters at a media briefing: “Regarding the American waiver on Russia, I would like to emphasise that we have been purchasing from Russia earlier — before waiver also, during waiver also, and now also.” The continued availability of discounted Russian crude at below-market prices — estimated at $15-20 per barrel below international benchmarks — provides meaningful cost relief to Indian OMCs even as Brent remains near $110.

The equity market divergence

The rupee’s continued weakness stands in interesting contrast to the equity market performance on May 20. The Sensex climbed 366.71 points to 75,706.88 in early trade and the Nifty advanced 107.45 points to 23,760 — driven by Iran deal hopes following Trump’s announcement of a strike pause. Foreign Institutional Investors were net buyers for the third straight session, purchasing equities worth ₹2,813.69 crore on Monday, reflecting the global risk-on sentiment from Iran de-escalation even as the rupee continues to weaken on the underlying macro pressures.

The divergence — equities rising on Iran deal hope while the rupee hits fresh record lows on the same day — reflects the market’s simultaneous pricing of two scenarios: optimism about a diplomatic resolution driving equity risk appetite, and continued caution about India’s external sector fundamentals until that resolution actually materialises and crude prices correct sustainably.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult a SEBI-registered financial advisor before making investment decisions.

Rupee hits fresh all-time low of 96.05 against dollar on May 15 as Brent approaches $110 — external sector stress deepens

Aditya Bhagchandani — Fri, 15 May 2026 09:39:13 +0000

The Indian rupee fell to a fresh all-time low of 96.05 against the US dollar on May 15, 2026, declining 0.3% in the session and eclipsing its previous record low of 95.9575 set just the day before. The rupee has now broken successive all-time lows in consecutive sessions — a pattern that signals the currency is in active, unresisted decline rather than episodic stress.

The proximate trigger is oil. Brent crude surged to $109.21 per barrel during the Indian market session on May 15 — up 3.30% on the day — as an Indian cargo vessel was sunk off the UAE coast and the Trump-Xi Beijing summit concluded without a concrete framework for resolving the West Asia conflict or reopening the Strait of Hormuz. With Brent approaching $110 and WTI above $98, India’s crude import bill is expanding in real time at a moment when the rupee’s weakness simultaneously inflates the rupee-denominated cost of every dollar of imports.

The currency’s trajectory through the crisis has been steep and accelerating. The rupee had hit 95.74 on May 12, recovered marginally to 95.63 on close and 95.61 on May 13, before breaching 95.9575 in the prior session and now printing 96.05 on May 15. In the space of three sessions, the rupee has moved from 95.61 to 96.05 — a depreciation of 44 paise — with each session setting a new all-time low. The pace reflects both the fundamental pressure from India’s external sector and the absence of any credible near-term resolution to the Hormuz closure that would allow crude prices to correct.

India’s forex reserves have fallen approximately $37 billion in thirty days to $690.69 billion as of May 1, with the RBI intervening to support the currency — but at a cost that is visibly depleting the war chest. The April 2026 WPI data released May 14 captured the early-crisis impact, showing fuel and power inflation at 24.71% year on year and crude petroleum up 88.06% — numbers that will worsen further in the May WPI reading if crude holds at current levels.

The rupee’s weakness creates a self-reinforcing loop for India’s macro. A weaker rupee raises the rupee cost of crude imports, widening OMC losses beyond the ₹1,600-1,700 crore per day already being absorbed even at $106-107 Brent. At $109-110 Brent with a rupee at 96, the effective per-barrel cost for Indian importers is approximately ₹10,490 — compared to approximately ₹9,200 when the crisis began in early March at $85 Brent and a rupee near 87. That is a 14% effective increase in rupee-denominated crude costs in ten weeks, of which the ₹3 per litre petrol hike implemented on May 15 covers only a fraction.

The rupee’s all-time low also raises the effective cost of India’s gold imports — already under pressure from the import duty hike to 15% from 6% implemented on May 13 — and inflates the dollar-denominated external debt servicing burden of Indian corporates with unhedged foreign currency borrowings.

RBI Governor Sanjay Malhotra had described a fuel price hike as inevitable at the SNB-IMF conference in Switzerland last week. The hike has now arrived, but the rupee’s continued fall to 96.05 on the same day signals that markets do not view the ₹3 per litre revision as sufficient to meaningfully alter India’s external sector trajectory in the absence of a Hormuz resolution.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult a SEBI-registered financial advisor before making investment decisions.

Rupee hits fresh record low of 95.86 against US dollar as crude prices and West Asia tensions weigh

Aditya Bhagchandani — Thu, 14 May 2026 04:45:31 +0000

The Indian rupee opened weaker on Thursday and depreciated 20 paise to hit a fresh record low of 95.86 against the U.S. dollar in early trade, pressured by elevated crude oil prices and concerns over the ongoing West Asia crisis.

At the interbank foreign exchange market, the rupee opened at 95.74 and later slipped further to 95.86 against the dollar, marking a fall of 20 paise from its previous close.

The rupee had slipped to an all-time low of 95.80 against the U.S. dollar on Wednesday and settled at 95.66, near its record closing low.

The domestic currency has now weakened by more than 6% against the U.S. dollar since the West Asia conflict began, making it Asia’s worst-performing currency so far in 2026.

The pressure on the rupee comes as Brent crude remained elevated. Brent crude futures were trading higher by 0.44% at $106.10 per barrel. Higher crude prices are a major concern for India as the country depends heavily on imports to meet its energy needs. A rise in crude prices increases the import bill and adds pressure on the currency.

In a major move aimed at protecting foreign exchange reserves, India raised import duties on gold and silver from 6% to 15%. However, traders said the rupee’s near-term direction will depend more on crude oil prices and the West Asia situation than on the gold duty move.

“From jewellery showrooms to fuel stations, every imported commodity is now carrying a heavier price tag and the rupee is feeling the weight of it,” CR Forex Advisors MD Amit Pabari said.

Geopolitical uncertainty also continued to impact sentiment. Pabari said U.S. President Donald Trump has stated that he does not expect China’s help in resolving the Iran conflict, while peace negotiations between Washington and Tehran remain on hold as both sides continue to disagree on key conditions.

Meanwhile, Chinese President Xi Jinping welcomed Trump at the Great Hall of the People for talks, calling 2026 a “historic, landmark year” for China-U.S. relations. The leaders are expected to discuss the Iran war, trade, technology and Taiwan during the visit.

The dollar index was trading at 98.48, down 0.04%. In domestic equities, the Sensex jumped 424.44 points to 75,033.42 in early trade, while the Nifty climbed 141.90 points to 23,554.50.

Foreign Institutional Investors offloaded equities worth Rs 4,703.15 crore on Wednesday, according to exchange data.

Overall, the rupee remained under pressure as high crude prices, foreign fund outflows and uncertainty around the West Asia conflict weighed on sentiment.

Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Currency and stock market movements are subject to market risks and global economic factors. Always conduct your own research or consult a financial advisor before making investment decisions.

Indian bond yields rise 3 bps to 7.06% on May 12 as Brent crude stays above $100 and ceasefire fears deepen

Aditya Bhagchandani — Tue, 12 May 2026 04:07:24 +0000

Indian government bonds opened weaker on May 12, with the benchmark 10-year bond yield rising 3 basis points to 7.0627% from 7.0317% in the previous trading session, as elevated crude oil prices and deepening uncertainty over the US-Iran ceasefire dampened investor appetite for fixed income.

Bond prices and yields move inversely, meaning the 3 bps rise in yield reflects a fall in bond prices as sellers outpaced buyers in early trade.

What is weighing on Indian bonds?

The primary driver is crude oil. Brent crude rose approximately 1% to $105 per barrel on May 12 after President Donald Trump said the ceasefire with Iran was “on massive life support,” signalling that the temporary halt in hostilities that has been in place since April 8 could soon come under renewed pressure. The two sides remain far apart on key demands, with no near-term resolution visible.

Elevated crude oil prices feed directly into India’s inflation outlook through higher fuel costs, freight rates, and manufactured goods prices — all of which flow through into the Consumer Price Index that the Reserve Bank of India targets at 4%. Higher expected inflation reduces the real yield on fixed-rate government bonds, making them less attractive to investors and pushing nominal yields higher to compensate.

What does the inflation data show?

Market participants are awaiting India’s CPI inflation print for March 2026, which will for the first time capture the full impact of the West Asia war disruptions on domestic prices. Inflation is expected to have risen to approximately 4% — right at the RBI’s mandate ceiling — a level that, if confirmed, would significantly reduce the probability of near-term rate cuts and keep bond yields elevated. Any print above 4% would further complicate the RBI’s monetary policy calculus at a time when the rupee is simultaneously at record lows and crude remains above $100.

The ₹32,000 crore bond auction

Adding supply-side pressure to the market, the government is scheduled to conduct an auction of bonds worth ₹32,000 crore later in the day through the sale of two papers. Large government bond auctions in a rising yield environment typically require higher cut-off yields to attract sufficient bidder interest, which can further push secondary market yields upward. Traders will watch the auction results closely for signals on market appetite and RBI support.

Broader market context

The bond market weakness on May 12 is part of a broader pattern across Indian financial markets. The rupee simultaneously hit a fresh record low of 95.58 against the dollar, the Sensex and Nifty declined more than 1%, and global bond yields rose overnight — led by a selloff in UK gilts and Japan’s 10-year yield hitting a 29-year high of 2.54%. The synchronised pressure across Indian bonds, currency, and equities reflects the multi-channel transmission of the Middle East war into India’s macroeconomic landscape.

For the RBI, the combination of a record-low rupee, elevated crude, and CPI approaching the 4% ceiling leaves limited room for the accommodative policy stance that India’s slowing growth environment would otherwise call for.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors are advised to consult a registered financial advisor before making any investment decisions. Business Upturn does not hold any position in the securities mentioned.

Rupee hits fresh record low at 95.58 against dollar as Brent crude surges to $105 on Iran ceasefire fears

Aditya Bhagchandani — Tue, 12 May 2026 03:44:52 +0000

The Indian rupee opened at a fresh all-time low against the US dollar on May 12, breaching the previous record as a confluence of surging crude oil prices, a stronger dollar, and elevated gold import demand pushed the currency to its weakest level ever.

At 9:10 am, the rupee was trading at 95.58 against the dollar, down 0.28% from its previous close of 95.31 — a new record low that underlines the mounting pressure on India’s external account from the ongoing Middle East war and its cascading effects on energy markets and currency flows.

What is driving the rupee to record lows?

The immediate trigger was President Donald Trump’s statement that the US-Iran ceasefire was “on life support” after rejecting Tehran’s latest peace proposal. The remarks shattered near-term hopes of a resolution to the conflict that has kept the Strait of Hormuz under effective constraint, pushing Brent crude futures to $105 per barrel on the day. The dollar index simultaneously strengthened to 98.10, reflecting risk-off flows into the greenback from emerging market currencies across Asia.

The rupee was not alone in weakening — broader Asian currency weakness was the backdrop against which the Indian unit fell, though India’s specific vulnerabilities around crude oil dependence make the rupee more exposed than most regional peers to an elevated oil price environment.

The gold import paradox

In an ironic twist that underlines the complexity of India’s forex challenge, market participants noted that dollar buying in the previous session was partly driven by increased gold imports — a surge in purchases ahead of any potential policy tightening following Prime Minister Modi’s appeal on May 10 urging citizens to avoid buying gold for weddings for one year. Traders and importers appear to have front-loaded gold purchases in anticipation that a duty hike or other restriction could follow the PM’s voluntary appeal, creating the precise forex outflow pressure the appeal was designed to reduce.

This front-loading effect — if sustained — could temporarily worsen the current account and rupee pressure before any demand reduction from Modi’s appeal materialises.

Market and economic context

The Sensex and Nifty both declined more than 1% on the day amid concerns over weaker consumption and slowing economic growth, with the rupee’s record low adding to the negative sentiment. A weaker rupee raises the cost of India’s already elevated crude oil import bill further — since oil is priced in dollars — creating a compounding effect on the current account deficit.

Experts said the rupee remains vulnerable to elevated crude oil prices and continues to face pressure from rising energy costs, with limited near-term relief visible unless crude prices moderate or ceasefire talks resume substantively.

What are traders watching?

Exporters who have already sold dollars are expected to wait for further depreciation toward the 96 level before re-entering the market, suggesting the market is already pricing in further weakness. The Reserve Bank of India is currently offering only limited support to the currency, signalling some tolerance for gradual depreciation rather than aggressive intervention. Importers who earlier had an opportunity to hedge at better levels may now wait for a correction in the dollar-rupee pair before increasing hedging activity — a positioning dynamic that could reduce near-term dollar buying pressure from that segment.

The 96 level is now the key psychological threshold being watched by currency traders, with the pace at which the rupee approaches it likely determined by the trajectory of crude oil prices and any developments in US-Iran ceasefire talks.

Currencies today: US dollar rises against Indian rupee, yen and Singapore dollar on Tuesday, May 12

Aditya Bhagchandani — Tue, 12 May 2026 03:41:14 +0000

The currency market showed a mixed trend on Tuesday, May 12, with the U.S. dollar strengthening against the Indian rupee, Japanese yen and Singapore dollar, while slipping slightly against the Chinese yuan. The Australian dollar and New Zealand dollar also traded lower against the U.S. dollar.

The USD/INR pair was trading at 95.6, up 0.29 or 0.304%, indicating weakness in the Indian rupee against the U.S. dollar. The USD/JPY pair also moved higher to 157.57, gaining 0.41 or 0.26%, while USD/SGD rose 0.002 or 0.181% to 1.271.

The EUR/JPY pair traded higher at 185.26, up 0.09 or 0.05%, showing mild strength in the euro against the Japanese yen. Meanwhile, USD/HKD was nearly flat at 7.828, slipping marginally by 0.001%.

On the downside, USD/CNY slipped 0.002 or 0.028% to 6.793, indicating slight strength in the Chinese yuan against the U.S. dollar. The AUD/USD pair declined 0.002 or 0.262% to 0.723, while NZD/USD fell 0.001 or 0.151% to 0.595.

Currency pair	Price	Change	% Change
USD/SGD	1.271	+0.002	+0.181%
USD/CNY	6.793	-0.002	-0.028%
AUD/USD	0.723	-0.002	-0.262%
USD/INR	95.6	+0.29	+0.304%
NZD/USD	0.595	-0.001	-0.151%
USD/JPY	157.57	+0.41	+0.26%
USD/HKD	7.828	-0	-0.001%
EUR/JPY	185.26	+0.09	+0.05%

Overall, the U.S. dollar traded stronger against several Asian currencies on Tuesday, May 12, with notable gains against the Indian rupee and Japanese yen. However, the greenback saw mild weakness against the Chinese yuan, while the Australian dollar and New Zealand dollar remained under pressure.

Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Currency market movements are subject to market risks and global economic factors. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.

Rupee Opens at 94.22 Against Dollar as Brent Crude Hits $106 — RBI Intervening But Pressure Persists

Aditya Bhagchandani — Fri, 24 Apr 2026 04:38:33 +0000

The Indian rupee opened at 94.22 against the US dollar on Friday, April 24, weakening from Thursday’s close of 94.11, as Brent crude oil’s relentless climb toward $106 per barrel kept sustained pressure on one of Asia’s most crude-sensitive currencies. The Reserve Bank of India has been intervening intermittently to cap volatility but the central bank’s efforts have provided only partial relief — the rupee has now fallen approximately 1.3% this week alone and is nearly two rupees weaker from its recent high near 92.50.

The Week’s Rupee Journey — From Recovery to Renewed Pressure

The move from 92.50 to 94.22 in a matter of days encapsulates exactly what the Iran war ceasefire diplomacy rollercoaster has done to Indian financial markets in compressed form. When the Strait of Hormuz opened briefly on Friday, April 18, crude crashed 11% and the rupee strengthened — market participants had priced in the beginning of a resolution that would ease India’s oil import bill, reduce current account pressure and allow the RBI to hold rates without inflationary pressure from energy costs.

That relief lasted less than 24 hours. The Hormuz reclosed. Brent bounced. The ceasefire deadline approached. Vance cancelled his Pakistan trip. Iran pulled out of talks. Crude spiked to above $102. Trump extended the ceasefire but kept the blockade. Brent settled near $99-100 before the next round of Iran tension pushed it back toward $106.

Each leg of that geopolitical sequence translated directly into rupee weakness — and the currency has not been able to recover the ground it briefly gained when the Hormuz opening created optimism.

Why Crude at $106 Hits India Harder Than Most

India imports approximately 85% of its crude oil requirements — making it the world’s third-largest oil importer and one of the economies most directly exposed to sustained crude price elevation. At $106 Brent, the mechanics are straightforward and painful. The oil import bill expands in dollar terms, widening the current account deficit. Domestic inflation rises as petroleum product prices — or the subsidies required to suppress them — increase. The RBI faces a policy bind where rate cuts to support growth conflict with the need to anchor inflation expectations. And the dollar demand generated by oil importers paying for their crude creates persistent structural selling pressure on the rupee.

Brent has risen nearly 18% this week to around $106 per barrel, briefly crossing $107 in the previous session — its highest level in two weeks. The Iran war’s maritime disruptions, the Strait of Hormuz situation and the elevated military alerts across the region have kept the risk premium in crude prices high even during ceasefire periods, because the market is correctly pricing the probability that the ceasefire could collapse at any point.

RBI’s Intervention — What It Is and What It Is Not

Market participants have confirmed the RBI has been supplying dollars at multiple levels to moderate the pace of rupee depreciation. The central bank’s approach — described as intervening at multiple levels rather than defending a specific threshold — is a deliberate choice to smooth the depreciation curve rather than peg the currency at an artificial level that market pressure would eventually overwhelm.

This is the technically correct approach in a situation driven by fundamental macroeconomic forces rather than speculative positioning. When crude is at $106 and India’s oil import bill is expanding structurally, the RBI cannot sustainably defend 93 or 94 by selling dollars indefinitely without depleting reserves. What it can do is prevent disorderly moves — sharp single-day falls or volatility spikes that damage business and household confidence — while allowing the currency to find its market level gradually.

The limitation of this approach is visible in the numbers. Despite RBI intervention, the rupee has still fallen 1.3% this week and is nearly two rupees weaker from its recent high. The intervention has moderated the pace. It has not reversed the direction. The dollar demand from oil importers is simply larger and more sustained than the RBI’s current intervention pace can offset.

What Comes Next for the Rupee

The rupee’s near-term trajectory is almost entirely a function of two variables — crude oil prices and the Iran ceasefire diplomatic outcome. If the ceasefire extension produces a second round of talks that shows genuine progress toward a deal, crude will ease, dollar demand from oil importers will reduce, and the rupee will find relief toward the 93-93.50 range. If the ceasefire expires without a deal and military operations resume, crude pushes toward $110-115, the current account deficit widens further, and the rupee’s next significant level becomes 95 and potentially beyond.

The RBI’s foreign exchange reserves — at approximately $688 billion as of the last reporting week — provide substantial capacity for intervention. India is not in a balance of payments crisis. But the central bank’s preference is clearly to conserve reserves for genuine emergencies rather than deploy them defending a specific exchange rate in the face of sustained global oil price pressure driven by a geopolitical conflict it cannot control.

At 94.22, the rupee is pricing the current uncertainty — a ceasefire that is extended but conditional, a blockade that remains in place, crude that is near multi-week highs, and an RBI that is present but not omnipresent in the forex market. Resolution of the Iran situation, either through a genuine deal or a definitive military outcome that the market can price, is the single most important catalyst for rupee stabilisation.

Disclaimer: This article is for informational purposes only and does not constitute investment or currency trading advice. Exchange rates are subject to continuous change. Readers are advised to consult qualified financial advisors before making decisions based on currency movements.

RBI withdraws April 1 circular, bars INR-linked deals with related parties

Markets Desk — Mon, 20 Apr 2026 10:19:32 +0000

The Reserve Bank of India has withdrawn its earlier circular dated April 1, 2026, and introduced revised guidelines restricting foreign exchange derivative contracts involving the Indian rupee with related parties.

In a fresh communication under its Risk Management and Inter-Bank Dealings framework, the central bank said authorised dealers will no longer be permitted to undertake forex derivative contracts involving INR with related parties, except under limited conditions.

The RBI clarified that such transactions will only be allowed in two specific cases: cancellation or rollover of existing contracts, and transactions carried out with non-related non-resident users on a back-to-back basis, in line with the Master Direction on Risk Management and Inter-Bank Dealings.

The regulator also defined “related parties” in accordance with applicable accounting standards, including Ind AS 24 and IAS 24, covering related party disclosures and equivalent frameworks.

The revised instructions have come into effect immediately, the RBI said, adding that the directions are issued under provisions of the Foreign Exchange Management Act (FEMA), 1999.

The move is seen as part of the central bank’s efforts to strengthen oversight and risk controls in forex derivative markets, particularly in transactions involving related entities.

India’s foreign exchange reserves surge by $3.825 billion to $700.946 billion

Niraj Jadhav — Fri, 17 Apr 2026 12:19:01 +0000

India’s foreign exchange reserves increased by $3.825 billion to reach $700.946 billion for the week ended April 10, according to the latest data released by the Reserve Bank of India.

Forex reserves register steady growth

The rise in reserves reflects strengthening external fundamentals and improved capital inflows. As per the reports in The Economic Times and Reuters, the increase was primarily driven by a rise in foreign currency assets, which form the largest component of the reserves. An RBI update noted, “Foreign exchange reserves continue to remain robust, providing a cushion against external shocks,” highlighting the central bank’s confidence in the country’s financial stability.

Components of reserves show a positive trend

The reserves include foreign currency assets, gold reserves, Special Drawing Rights (SDRs), and India’s reserve position with the International Monetary Fund. Analysts indicate that fluctuations in global currency values and central bank interventions also influence weekly changes. As per the reports in Business Standard, gold reserves have also shown moderate gains, reflecting global price movements and diversification strategies.

Strong buffer against global uncertainties

The increase comes at a time of heightened global uncertainty, including geopolitical tensions and volatile energy markets. Economists believe that a strong forex reserve position helps India manage currency stability and maintain investor confidence. Experts note that adequate reserves allow the central bank to intervene in currency markets when needed, ensuring the smooth functioning of the financial system.

Positive signal for the economy and investors

The growth in reserves is seen as a positive indicator for the Indian economy, signalling resilience and preparedness to handle external shocks. It also strengthens India’s position in global financial markets. As global economic conditions remain uncertain, maintaining a healthy reserve buffer will be crucial for sustaining economic stability and supporting growth.

Indonesia’s Currency Just Hit Its Weakest Level in History — and the Reasons Go Far Beyond the Iran War

Aditya Bhagchandani — Fri, 17 Apr 2026 03:45:05 +0000

The Indonesian rupiah fell to a historic low of 17,190 against the US dollar on Friday, breaching levels not seen in the currency’s modern history as a confluence of geopolitical shock, persistent capital outflows, and fragile domestic fundamentals overwhelmed whatever relief ceasefire optimism had briefly offered earlier this week.

The move extends a slide that has been building since the outbreak of the US-Iran war on February 28 and reflects a broader emerging market rout in which currencies most exposed to energy price volatility and portfolio outflows are bearing the sharpest pain. For Indonesia, that exposure is acute — the country is a net oil importer despite being a producer, meaning every dollar of elevated crude pricing drives a direct deterioration in its trade balance, import costs, and fiscal position simultaneously.

What Is Driving the Rupiah to Record Lows

The immediate catalyst for Friday’s move is the failure of the Islamabad talks on April 12, which sent the dollar firming across Asian markets as hopes of a quick diplomatic resolution to the Iran conflict receded. The rupiah weakened to a fresh low above IDR 17,100 per dollar on Monday, extending losses for a third straight session as the US dollar firmed after the collapse of the US-Iran peace talks over the weekend. Friday’s print of 17,190 marks a further deterioration from that level.

But the war is not the only story here. Domestic fundamentals also pointed to strain, with consumer mood sliding to a five-month low in March and foreign reserves dropping to the lowest in nearly two years. This is a currency under pressure from two directions simultaneously — external geopolitical shock compounding pre-existing domestic fragility — which is precisely why the rupiah has not found relief even on days when the broader dollar index has weakened.

S&P Global Ratings said that Indonesia’s sovereign credit profile is among the most exposed to a prolonged conflict in the Middle East. Indonesia produces oil but remains a net importer, so higher energy prices amid the fallout from the Iran war have raised import and subsidy costs, weakening the country’s external trade balance and fiscal position.

Bank Indonesia Caught Between Inflation Risk and Stability Defence

The pressure is landing at a particularly difficult moment for Bank Indonesia. In March, Bank Indonesia held its benchmark rate at 4.75% for a sixth straight meeting, following a cumulative 150 basis points of reduction since September 2024. While current inflation remained within the central bank’s target range, risks are tilted to the upside due to volatile oil prices and rising fiscal pressures linked to President Prabowo’s key programmes.

Governor Perry Warjiyo has been explicit about the bind his institution faces. Having spent the better part of six months cutting rates to support growth, Bank Indonesia now has limited room to ease further without risking additional currency depreciation. Policymakers have signalled limited room for further easing, with Governor Warjiyo stressing a shift toward safeguarding stability through measured and consistent intervention in both spot and non-deliverable forward markets.

The problem is that intervention burns reserves — and reserves are already at a near two-year low. Every dollar Bank Indonesia deploys defending the rupiah in the spot market is a dollar removed from a buffer that markets are already watching nervously. The central bank’s monetary policy meeting next week will be among the most closely watched in Southeast Asia this quarter.

The Capital Outflow Problem Is Not Going Away

Beyond oil and the war, the rupiah’s slide carries a domestic dimension that Indonesian authorities have been reluctant to address directly. The currency’s recent slide appears to reflect investors’ concerns about the independence of Bank Indonesia, following reports that President Prabowo Subianto had nominated his nephew to the vacant post of deputy governor. While Governor Warjiyo has defended the nomination process as legally compliant and professionally governed, the market perception problem has not been resolved by those assurances.

Capital outflows from Indonesian bond and equity markets have been persistent and broad-based. The Iran war has caused disruptions in the global oil market, leading to higher energy prices. Additionally, the instability in the Middle East has led to capital outflows from Indonesia’s bond and equity markets, as investors move their funds into safer assets like the US dollar, exacerbating the downward pressure on the rupiah.

The rupiah has now weakened approximately 4% in 2026 alone, on top of a 3.5% decline across the entirety of 2025. That cumulative erosion is beginning to translate into tangible economic consequences — rising energy costs and a weaker currency are beginning to squeeze profitability in import-dependent sectors such as manufacturing and transport.

India Angle: A Mirror and a Warning

For Indian markets, the rupiah’s slide carries relevance beyond regional sympathy. Indonesia and India share a structural profile as large, import-dependent Asian economies with significant exposure to oil price volatility and global risk appetite. The rupee hit a record low near 95 per dollar in recent weeks before recovering to 93.23 on Iran deal optimism — a trajectory that mirrors Indonesia’s experience, with the difference being that India’s reserve position and current account dynamics are somewhat more resilient.

If the Iran conflict drags on without a Hormuz resolution, the pressure on both currencies will intensify. Indian importers, oil marketing companies, and businesses with dollar-denominated obligations are watching the Indonesian rupiah’s collapse not as a distant emerging market story but as a preview of what sustained geopolitical energy disruption does to currencies like their own.

What Happens Next

The rupiah’s path from here depends almost entirely on two variables: the trajectory of the Iran ceasefire negotiations ahead of the April 21-22 deadline, and Bank Indonesia’s willingness to deploy reserves aggressively enough to arrest the slide before it becomes self-fulfilling. A second round of US-Iran talks in Islamabad — which NBC News reports could happen as early as this week — would provide temporary relief. A breakdown of the ceasefire or a resumption of hostilities would almost certainly push the rupiah through 17,200 and potentially beyond.

At 17,190, Indonesia’s currency is in territory it has never been before. The question is whether the diplomacy moves fast enough to stop it going further.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Readers are advised to consult a SEBI-registered or relevant financial advisor before making investment decisions.

China exports slow in March amid Middle East tensions and energy market pressures

Niraj Jadhav — Tue, 14 Apr 2026 05:26:44 +0000

China has reported a slowdown in export momentum in March, as global economic conditions and geopolitical tensions impacted demand. The deceleration comes at a time when international markets are adjusting to uncertainty linked to conflict in the Middle East, which has contributed to volatility in energy prices and supply chains. Analysts note that China’s export driven economy remains sensitive to global disruptions, particularly those affecting major trading partners and industrial demand.

Energy shock influences global trade dynamics

The ongoing tensions in the Middle East have triggered an energy shock, leading to rising fuel costs and increased transportation expenses. Higher energy prices often translate into increased production and logistics costs, affecting export competitiveness. For China, which plays a central role in global manufacturing, such cost pressures can influence pricing strategies and demand from overseas buyers. The impact is being felt across multiple sectors, including technology and industrial goods.

AI demand meets economic uncertainty

While global interest in artificial intelligence driven technologies continues to grow, economic uncertainty has moderated the pace of new orders. Buyers seeking to invest in advanced technologies are also factoring in broader market risks, including geopolitical instability and fluctuating costs. This has created a mixed outlook, where strong long term demand for innovation coexists with short term caution in spending and procurement.

Policy focus on sustaining growth

Chinese authorities are expected to closely monitor export trends and consider policy measures to support economic growth. Maintaining stable trade performance is a key priority, particularly as external challenges persist. Efforts may include boosting domestic demand, enhancing trade partnerships, and supporting key industries affected by global conditions. The government’s approach will be critical in managing the impact of external shocks.

Global implications of export slowdown

China’s export performance has significant implications for the global economy, given its role as a major supplier of goods. A slowdown can affect supply chains, pricing, and availability of products worldwide. Countries reliant on Chinese exports may experience adjustments in trade flows, while global markets respond to changing economic signals.

Outlook for trade and economic stability

The outlook for China’s exports will depend on developments in the Middle East, energy markets, and global demand conditions. Stability in these areas could support a recovery in trade activity. As the situation evolves, policymakers and businesses will continue to adapt to shifting dynamics, balancing growth objectives with external risk

Economic rivalry intensifies as China and Iran counter US financial pressure

Niraj Jadhav — Sun, 12 Apr 2026 10:55:07 +0000

The United States continues to leverage its economic strength in global competition, using tools such as sanctions, trade restrictions, and financial controls to exert influence. However, both China and Iran have responded by strengthening control over critical economic assets, creating a more complex and competitive global landscape. This evolving dynamic reflects a shift from traditional military rivalry to economic competition, where control over resources, supply chains, and financial systems plays a central role.

Use of sanctions and financial influence

The United States has long relied on its position in global finance to impose economic pressure on other nations. Sanctions targeting sectors such as energy, banking, and technology are key instruments in its strategy. These measures are designed to influence policy decisions and limit economic capabilities of targeted countries. However, their effectiveness depends on global compliance and the ability of affected nations to find alternatives.

China and Iran strengthen economic resilience

China and Iran have adopted strategies aimed at reducing vulnerability to external pressure. China has focused on expanding domestic production, securing supply chains, and increasing its influence in global trade networks. Iran, facing long term sanctions, has worked to maintain economic activity through alternative trade arrangements and regional partnerships. Control over critical assets such as energy resources, infrastructure, and key industries has become central to these efforts. By strengthening internal capacity and diversifying economic relationships, both countries aim to counter external constraints.

Importance of critical resources and supply chains

Access to essential resources and control of supply chains have emerged as key factors in economic competition. Countries that manage these assets effectively can mitigate the impact of external pressures and maintain economic stability. The competition over critical minerals, energy supplies, and manufacturing capabilities highlights the strategic importance of economic resources in shaping global influence.

Implications for global markets and trade

The ongoing economic rivalry has implications for global markets, including potential disruptions in trade flows and price fluctuations. Businesses and investors must navigate an environment characterised by uncertainty and shifting alliances. International trade patterns are also evolving, as countries seek to diversify partnerships and reduce dependence on any single market.

Outlook for economic competition

The interaction between the United States, China, and Iran underscores the growing importance of economic strategy in international relations. As nations continue to adapt to changing conditions, economic resilience and resource control will remain central to global competition. The situation highlights the need for balanced approaches that promote stability while addressing strategic interests.

Trump signals potential trade cut with Spain, raising concerns over market stability

Niraj Jadhav — Sat, 11 Apr 2026 11:44:47 +0000

Donald Trump has stated during a live conference that the United States could consider cutting off trade relations with Spain. The remark, delivered in a direct and assertive tone, has drawn immediate attention due to its potential economic and diplomatic implications. While no formal policy announcement has been issued, the statement has sparked concerns among analysts and market participants about possible disruptions in bilateral trade and broader global economic stability.

Trade relations between United States and Spain

The United States and Spain maintain established trade ties involving goods, services, and investment flows. Trade between the two countries forms part of the wider economic relationship between the United States and the European region. Any move to restrict or suspend trade would represent a significant shift in policy, potentially affecting sectors such as manufacturing, agriculture, and services. Analysts note that such decisions typically involve complex negotiations and legal considerations.

Market reactions and economic concerns

Statements indicating potential trade restrictions often influence financial markets, as investors respond to uncertainty and the risk of economic disruption. The suggestion of cutting trade with Spain has raised concerns about possible volatility in global markets. Market stability is closely linked to predictable trade policies, and abrupt changes can impact investor confidence. Economists have highlighted that any escalation in trade tensions could have ripple effects beyond the countries directly involved.

Diplomatic implications and international relations

The statement also carries diplomatic significance, as trade policies are closely tied to broader international relations. Spain, as a key European economy, plays an important role in regional and global trade networks. Any deterioration in trade relations could influence diplomatic engagement and cooperation on other issues. Governments typically address such matters through dialogue and negotiation to avoid escalation.

Need for clarity on policy direction

Experts emphasise that official policy decisions require formal processes, including consultations and legal review. Statements made during public events may not always translate into immediate action, but they can signal potential shifts in approach. Clear communication from authorities will be important in determining the actual direction of trade policy and its implications for businesses and markets.

Outlook for global trade environment

The situation highlights the sensitivity of global trade to political statements and policy signals. As economies remain interconnected, developments involving major countries can influence global economic conditions. Further updates are expected as policymakers provide clarity on the issue and assess its potential impact.

France repatriates 129 tonnes gold from Newyork, who’s next ?

Rashmi Pandey — Mon, 06 Apr 2026 09:14:28 +0000

France’s central bank, Banque de France, has undertaken a major gold-reserve operation involving the sale of 129 tonnes of gold previously stored at the Federal Reserve Bank of New York, followed by the purchase of equivalent quantities that meet updated European quality and certification standards.

According to open-source financial and central banking briefings, the transaction resulted in an estimated €12.8 billion accounting gain, largely driven by the sharp rise in global gold prices amid ongoing geopolitical and economic uncertainty.

Strategic reserve management

Officials indicated that the operation does not change France’s overall gold holdings, which remain at approximately 2,437 tonnes—making it one of the largest gold reserve holders globally. François Villeroy de Galhau confirmed that the move was aimed at optimizing reserve quality and improving compliance with current international standards, rather than altering reserve composition.

France has historically maintained a strong preference for gold as a strategic asset, with a significantly higher share of reserves held in bullion compared to the eurozone average. Analysts note that this reflects a long-standing policy of prioritizing stability and diversification during periods of global volatility.

Repatriation and sovereignty focus

The operation also aligns with France’s broader policy of gradually reducing reliance on foreign storage facilities and increasing domestic custody of gold reserves. Over recent years, authorities have overseen the transfer of significant quantities of gold back to France, citing logistical efficiency, transparency, and financial sovereignty as key motivations.

By selling older holdings stored abroad and replacing them with newly certified gold bars meeting modern purity and traceability requirements, the central bank has effectively upgraded the quality of its reserves while benefiting from favourable market conditions.

Gold prices and market context

Global gold prices have surged in recent months, supported by heightened geopolitical tensions, inflationary pressures, and increased demand from central banks seeking to diversify away from traditional reserve assets. The Strait of Hormuz tensions and broader instability in energy markets have further strengthened gold’s appeal as a safe-haven asset.

Market observers point out that central banks across Europe and beyond have been steadily increasing their gold exposure, reinforcing its role as a stabilizing component of national reserves.

Broader implications

France’s move is being viewed as part of a wider trend among sovereign institutions reassessing reserve strategies in a shifting global financial environment. While the accounting gain strengthens the central bank’s balance sheet, officials have emphasized that gold will continue to serve its traditional role as a long-term store of value rather than a short-term profit instrument.

The development highlights how central banks are actively adapting reserve management practices to evolving market conditions while maintaining financial stability priorities.

Rupee Crosses 95 for the First Time Ever — And the RBI’s Emergency Fix Is Already Losing Its Effect

Aditya Bhagchandani — Mon, 30 Mar 2026 10:08:45 +0000

The Indian rupee breached the 95 per dollar mark for the first time in its history on Monday, March 30, 2026, weakening to 95.21 per dollar, a fall of 0.3 percent from the previous close. It is the third consecutive session of record lows for the currency and the milestone carries a significance that goes beyond the number itself. The rupee has now crossed a psychological threshold that would have seemed unthinkable even a year ago, and it did so on the very day the RBI’s emergency forex position cap was supposed to provide relief.

The relief lasted hours. By Monday’s session the rupee had given up all of its early gains as corporates entered arbitrage trades between the onshore spot market and non-deliverable forwards, exploiting precisely the gap that the RBI’s Friday circular was designed to close. The central bank’s tightening of banks’ forex position limits had opened a window that non-bank corporate players moved into immediately, partially negating the intended effect before the trading day was over.

The Worst Fiscal Year in Over a Decade

The rupee is now on course to log its steepest fiscal year drop since 2011-12. India’s fiscal year ends on March 31, which is tomorrow, a trading holiday for Mahavir Jayanti, meaning today’s close near 95.21 will effectively be the fiscal year’s closing rate. The depth of the full year’s depreciation reflects the accumulation of pressures that have built across FY 2025-26, from global trade frictions and persistent FPI outflows through the early months to the Iran war’s devastating impact on oil prices, the current account, and investor sentiment in the final weeks.

The Nifty 50 is on course for its worst monthly performance since March 2020 driven by oil price worries. Indian government bonds are heading for their worst fiscal year since 2023. The simultaneous deterioration across currency, equity, and bond markets reflects a macro stress that is broad-based and mutually reinforcing rather than concentrated in any single asset class.

Why the RBI Cap Is Not Working as Hoped

The RBI’s Friday evening circular capping authorised dealer banks’ net open rupee position at $100 million per day was designed to force an unwinding of the onshore-NDF arbitrage trade that had been draining India’s foreign exchange reserves. The mechanism was supposed to force banks to sell their onshore dollar holdings, injecting dollar supply into the onshore market and mechanically supporting the rupee.

The problem that emerged on Monday is that closing the bank channel opened space for corporate players. When the rupee opened sharply higher on the cap news, corporates recognised the opportunity and entered the same onshore-NDF arbitrage trades that banks had been running, substituting themselves as the extractors of the spread. The RBI capped banks. It did not cap the corporate sector. The arbitrage did not disappear. The players changed.

Barclays articulated the fundamental limitation of the RBI’s action with characteristic directness in a Monday research note. “The bottom line is that the RBI’s cap does not change the underlying dynamics that fuelled pressure on the currency,” the analysts wrote. “The INR remains particularly vulnerable to an oil supply shock, while India’s balance of payments position may deteriorate further, and capital and financial account pressures are increasing.”

The Barclays assessment identifies the three structural drivers that no regulatory circular can address. Oil above $100 per barrel is a direct hit to India’s import bill and current account deficit. The balance of payments is deteriorating as energy import costs surge and FPI outflows continue. And the capital and financial account is under pressure from both the global risk-off environment and India-specific concerns about the economic impact of the Iran conflict on growth and inflation.

What 95 Means for the Indian Economy

Every rupee of weakness against the dollar has real economic consequences that compound across India’s import-dependent economy. At 95 per dollar versus the pre-war level of approximately 86, every dollar-denominated import costs approximately 10.5 percent more in rupee terms than it did when the conflict began. For oil, which India imports in volumes of approximately 4.5 to 5 million barrels per day, the combined effect of a higher dollar crude price and a weaker rupee means the rupee cost of India’s daily oil import bill has increased dramatically since February 28.

The rupee’s weakness is itself inflationary. Higher import costs for oil, edible oils, electronic components, and capital goods feed through into domestic prices with a lag of weeks to months. The RBI, which had been in a rate-cutting cycle before the conflict began, now faces the deeply uncomfortable prospect of a currency at record lows and import-driven inflation rising at a moment when the economy also needs growth support. The monetary policy options available to a central bank managing that contradiction are severely constrained.

The fiscal year that ends tomorrow with the rupee at 95.21 is a year that will be studied in Indian economic history for a long time. The Iran war that began on February 28 compressed into five weeks a currency deterioration that would normally take years, exposed the structural vulnerabilities in India’s balance of payments position, and forced the RBI into emergency regulatory interventions of a kind not seen since 2011. None of those interventions have changed what Barclays identified as the bottom line. The underlying dynamics remain intact.

The new fiscal year begins on April 1. The rupee begins it at 95. The war continues.

Exchange rate data and analyst quotes are sourced from Reuters and Barclays research note as of March 30, 2026. This article is for informational and educational purposes only and does not constitute financial or investment advice. Readers are advised to consult a registered financial advisor for investment decisions.

Rupee crosses 95.22 against US Dollar — how does this make your life worse? Explained

Markets Desk — Mon, 30 Mar 2026 09:44:22 +0000

The Indian rupee slipped to a fresh low of 95.22 against the US dollar, pressured by continued buying in the non-deliverable forward (NDF) market as participants squared off positions. The sharp move reflects persistent global volatility and sustained demand for the dollar.

A weaker rupee has wide-ranging implications for the Indian economy and directly impacts everyday expenses for consumers.

One of the most immediate effects is on fuel prices. India imports a significant portion of its crude oil requirements, and a weaker rupee makes these imports more expensive. This often leads to higher petrol and diesel prices, which in turn pushes up transportation and logistics costs across sectors.

The depreciation also affects inflation more broadly. Imported goods such as electronics, machinery, and even certain food items become costlier, adding pressure on household budgets. Companies dependent on imported raw materials may see rising input costs, which are often passed on to consumers.

For individuals planning to travel abroad or pay for foreign education, the impact is even more direct. Expenses such as tuition fees, accommodation, and travel become significantly more expensive as the rupee weakens against the dollar.

Equity markets can also feel the impact. A falling rupee sometimes leads to foreign investors pulling out funds due to currency risk, which can add to volatility in domestic markets. However, export-oriented sectors such as IT and pharmaceuticals may benefit, as they earn revenues in dollars.

The currency movement also influences interest rates and monetary policy expectations, as a weaker rupee can complicate efforts to manage inflation.

Overall, while a weaker rupee may benefit certain export-driven industries, it tends to increase the cost of living and adds pressure on the broader economy, making everyday expenses higher for consumers.

The RBI Circular That Could Pull the Rupee From 94 Back Toward 92 — And the Bigger Problem It Cannot Fix

Aditya Bhagchandani — Mon, 30 Mar 2026 07:21:14 +0000

Read the full article on Business Upturn

India prioritizes domestic supply to strengthen manufacturing amid global uncertainty

Priya Jha — Thu, 19 Mar 2026 08:35:15 +0000

India’s Trade Secretary has emphasized that the government is focused on protecting domestic supplies to improve local manufacturing, while exports take a backseat in the current policy framework.

This approach reflects India’s changing economic strategy amid global uncertainties, such as trade disruptions, geopolitical tensions, and shifting supply chains. In recent statements and policy guidelines, officials have stressed the importance of securing raw materials, critical components, and essential goods for Indian industries. This strategy aims to reduce dependence on imports, especially from major sources like China, and to strengthen self-reliance through the broader Aatmanirbhar Bharat (Self-Reliant India) initiative.

The Union Budget for 2026-27 and related measures highlight this focus. Reducing tariffs on capital goods, raw materials, and inputs for sectors like energy transition, electronics, and pharmaceuticals is designed to lower production costs and build strong domestic capacities. For example, incentives are aimed at key areas such as semiconductors, active pharmaceutical ingredients (APIs), and defense equipment, where at least 65% of needs are now met locally. These steps ensure that essential supplies stay available for Indian manufacturers, supporting job creation, industrial growth, and long-term economic stability.

While exports remain important, India is targeting ambitious goals, such as tripling goods exports to $1.3 trillion by 2035 through deregulation, manufacturing hubs, and free trade agreements. However, the clear message is that domestic priorities come first. Recent trade deals, including those with the EU and interim arrangements with the US, have balanced export gains—such as better access for textiles, leather, and marine products—with protections for sensitive sectors like agriculture and dairy. Officials have repeatedly emphasized the need to protect domestic interests, despite challenges in global markets from tariffs and conflicts.

Sovereign Gold Bond Prices Today — March 18, 2026: Check Latest SGB Rates on BSE and NSE

Aditya Bhagchandani — Wed, 18 Mar 2026 06:44:48 +0000

Sovereign Gold Bonds are having a mixed session today on both BSE and NSE. While a handful of series are trading in the green, the majority are under pressure, with some longer-dated series seeing sharper corrections. Here is a complete look at how all active SGB series are trading as of March 18, 2026.

What Is the SGB Trading Price Today?

SGB prices today are broadly ranging between ₹14,903 and ₹15,706 across all active series on BSE and NSE. The variation reflects differences in maturity dates, liquidity, and how each series is being priced relative to the underlying gold rate — which stands at ₹15,775 per gram for 24K gold today.

SGB Rates Today — BSE and NSE (March 18, 2026)

Series	Exchange	Price (₹)	Change
SGBJAN30IX	BSE	15,700.00	+200.00 (+1.29%)
SGBJAN27	NSE	15,320.93	+119.93 (+0.79%)
SGBJUN27	NSE	15,349.69	+82.89 (+0.54%)
SGBJAN27	BSE	15,656.40	0.00 (0.00%)
SGBJAN29X	BSE	15,320.14	0.00 (0.00%)
SGBJUN28	BSE	15,322.09	0.00 (0.00%)
SGBJUL29IV	BSE	15,399.00	0.00 (0.00%)
SGBJU29III	BSE	15,320.00	0.00 (0.00%)
SGBJAN29IX	BSE	15,400.00	-1.00 (-0.01%)
SGBJUN31I	BSE	15,706.00	-44.00 (-0.28%)
SGBJUN29II	BSE	15,260.00	-44.56 (-0.29%)
SGBJ28VIII	NSE	15,304.76	-44.24 (-0.29%)
SGBJUN28	NSE	15,274.98	-44.88 (-0.29%)
SGBJUN31I	NSE	15,690.89	-50.20 (-0.32%)
SGBJUN29II	NSE	15,259.99	-56.01 (-0.37%)
SGBJU29III	NSE	15,249.99	-70.27 (-0.46%)
SGBMAY29I	NSE	15,240.01	-81.38 (-0.53%)
SGBJUL27	NSE	15,200.00	-85.00 (-0.56%)
SGBDE31III	NSE	15,790.01	-99.48 (-0.63%)
SGBJUL28IV	NSE	15,218.00	-101.92 (-0.67%)
SGBDE30III	NSE	15,598.00	-106.27 (-0.68%)
SGBJUL28IV	BSE	15,225.00	-117.21 (-0.76%)
SGBJUN30	NSE	15,421.00	-119.00 (-0.77%)
SGBJAN30IX	NSE	15,350.00	-131.84 (-0.85%)
SGBJAN29X	NSE	15,210.00	-140.00 (-0.91%)
SGBJAN29IX	NSE	15,216.00	-166.63 (-1.08%)
SGBJUL29IV	NSE	15,211.00	-241.77 (-1.56%)
SGBJUN30	BSE	15,571.00	-354.32 (-2.22%)
SGBJUL27	BSE	15,285.00	-626.74 (-3.94%)
SGBJ28VIII	BSE	14,903.00	-1,009.86 (-6.35%)

Today’s Session at a Glance

The session is broadly under pressure. Of the thirty active series tracked today, only three are in positive territory — SGBJAN30IX on BSE leading gains at +1.29%, followed by SGBJAN27 on NSE at +0.79% and SGBJUN27 on NSE at +0.54%. Four series are unchanged. The remaining twenty-three are in the red, with losses ranging from a marginal -0.01% to a sharp -6.35% on SGBJ28VIII on BSE.

The steeper losses in certain BSE-listed series — particularly SGBJUL27 BSE (-3.94%) and SGBJ28VIII BSE (-6.35%) — are likely a reflection of thin liquidity in those specific series rather than a fundamental re-rating of gold. SGB series with lower trading volumes can see exaggerated price moves on days with limited buyer interest.

Why Do SGB Prices Differ From the Physical Gold Rate?

This is one of the most common points of confusion for SGB investors. The underlying 24K gold rate today is ₹15,775 per gram, yet most SGB series are trading between ₹15,200 and ₹15,700. The gap exists for a few reasons.

SGBs trade on the secondary market like any other listed security, and their price is determined by demand and supply on the exchange — not solely by the gold price. Series closer to their maturity date tend to trade closer to the prevailing gold NAV, while longer-dated series can trade at a discount due to the opportunity cost of locking in capital for an extended period. Liquidity also plays a significant role — thinly traded series can deviate more meaningfully from the gold price on any given day.

For investors holding SGBs to maturity, the secondary market price is largely irrelevant. At maturity, the RBI redeems SGBs at the prevailing gold price for those grams, plus the 2.5% annual interest earned through the holding period — making them one of the most tax-efficient and cost-effective ways to hold gold in India.

SGB vs Physical Gold — Which Makes More Sense Today?

With physical 24K gold at ₹15,775 per gram today, several SGB series are currently trading at a meaningful discount to that rate on the secondary market. For investors comfortable with exchange-traded instruments and a longer holding horizon, buying SGBs at a discount to NAV — and collecting 2.5% annual interest on top — is a structurally more efficient proposition than buying physical gold at full retail price plus making charges and GST.

The caveat is liquidity. If you need to exit before maturity, you are at the mercy of secondary market trading volumes, which can be thin for certain series as today’s session illustrates.

Key Things to Remember Before Buying SGBs

Interest income: SGBs pay 2.5% per annum on the issue price, credited semi-annually to your bank account. This is taxable as per your income slab.

Tax on maturity: Capital gains on SGB redemption at maturity are completely tax-free for individual investors — a significant advantage over physical gold and gold ETFs.

Early exit: SGBs can be redeemed with the RBI after the fifth year from the issue date on interest payment dates. Secondary market exit is available anytime through BSE or NSE, subject to liquidity.

Minimum purchase: One gram of gold, with a maximum of 4 kg per financial year for individuals.

Gold rates and SGB prices move through the day. For live secondary market prices, track BSE and NSE directly or check platforms like Zerodha, Groww, or Kite. For new issuance prices, monitor RBI notifications.

Disclaimer: SGB prices and gold rates mentioned are as of March 18, 2026, sourced from publicly available market data. This article is for informational purposes only and does not constitute financial or investment advice.

Rupee opens at 92.39/$ today; holds steady despite oil pressure and global currency caution

Aditya Bhagchandani — Tue, 17 Mar 2026 03:36:49 +0000

The Indian rupee opened at 92.39 per US dollar on Tuesday, March 17, slightly stronger compared to Monday’s close of 92.42/$, as currency markets remained range-bound amid global uncertainty.

The marginal recovery comes even as Asian currencies traded in a tight range, with investors staying cautious due to ongoing tensions in the U.S.–Israel war with Iran, which continues to influence global risk sentiment.

Oil prices and geopolitical tensions weigh on rupee

The rupee, along with most Asian currencies, remains under pressure due to rising crude oil prices, driven by continued hostilities in the Middle East. Concerns around supply disruptions through the Strait of Hormuz have kept markets on edge, especially for oil-importing economies like India.

Higher oil prices typically widen India’s current account deficit, which in turn weighs on the rupee.

Dollar strength and central bank meetings in focus

The US dollar remained firm, with the dollar index holding near recent highs despite slight easing. Markets are now focused on key central bank meetings this week, particularly the US Federal Reserve’s rate decision on Wednesday.

Expectations that global central banks may delay rate cuts due to inflation risks from rising energy prices are also limiting gains in emerging market currencies.

Asian currencies remain range-bound

Across Asia, currencies showed limited movement:

The Australian dollar edged higher ahead of a likely RBA rate hike
The Japanese yen recovered slightly amid intervention concerns
The Chinese yuan held relatively steady on central bank support

Meanwhile, the Indian rupee remains below recent record lows, supported marginally by possible intervention by the Reserve Bank of India, as indicated in recent sessions.

Outlook

With oil prices, geopolitical tensions, and central bank decisions all in focus, the rupee is expected to remain volatile but range-bound in the near term, tracking global cues closely.

Dollar strengthens as USD/JPY nears 159.5, highest level since mid-2024

Aditya Bhagchandani — Fri, 13 Mar 2026 04:38:46 +0000

The U.S. dollar strengthened against the Japanese yen on Wednesday, with the USD/JPY pair trading around 159.45, its highest level since mid-2024.

The yen has remained under pressure in recent sessions, hovering near 159.2 per dollar, raising fresh concerns in markets about the possibility of intervention by Japanese authorities to support the currency.

Bank of Japan warns about weak yen impact

Kazuo Ueda, Governor of the Bank of Japan, warned that the weakening yen could intensify imported inflation, particularly as global oil prices continue to rise.

Ueda noted that exchange rate movements now have a greater impact on inflation than in previous years, meaning the central bank may need to consider faster policy normalization if currency weakness persists.

Oil surge adds pressure on yen

Energy prices have surged amid escalating tensions in the Middle East. Oil markets reacted sharply after reports that Mojtaba Khamenei, Iran’s newly declared supreme leader, pledged to keep the Strait of Hormuz effectively closed while Tehran increases attacks on regional oil and transport infrastructure.

A prolonged disruption in the Strait of Hormuz, one of the world’s most critical oil transit routes, has raised fears of tighter global energy supplies and higher import costs for countries like Japan.

War tensions remain elevated

The ongoing Middle East conflict continues to weigh on global markets, with strong rhetoric from both Iran and the United States suggesting that the conflict may persist after nearly two weeks of fighting.

Higher oil prices and geopolitical uncertainty are likely to remain key drivers for currency markets in the near term.

Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Market movements are subject to risks and uncertainties. The author and Business Upturn do not provide any trading recommendations and are not liable for any gains or losses arising from the use of this information.

Rupee rebounds 50 paise to ₹91.57 per dollar as RBI likely intervenes amid escalating US–Iran conflict

Markets Desk — Thu, 05 Mar 2026 04:20:47 +0000

The Indian rupee recovered sharply on Thursday, strengthening by nearly 50 paise to ₹91.57 against the US dollar, after the currency had slipped to record lows in the previous session amid heightened geopolitical tensions and volatility in global oil markets.

Traders said the Reserve Bank of India (RBI) likely intervened in both the spot and non-deliverable forward (NDF) markets to prevent a sharper fall in the currency. The intervention came after the rupee had come under significant pressure due to escalating tensions between the United States and Iran.

On Wednesday, the rupee had fallen to an intraday low of ₹93.31 and eventually closed at a record low of ₹92.15 per dollar, as uncertainty surrounding the conflict weighed on emerging market currencies. Market participants noted that the RBI was seen selling dollars near the ₹92.30 levels to stabilise the currency.

The ongoing conflict between the US and Iran has intensified concerns about global energy supplies, particularly as shipping routes through the Strait of Hormuz remain vulnerable. The strait is one of the world’s most critical energy corridors, and disruptions there have raised fears over oil supply and transportation costs.

Crude oil prices, which had briefly eased to around $80 per barrel overnight, rebounded sharply to nearly $83.50 per barrel, approaching their highest levels in about one-and-a-half years.

For India, the situation presents a significant challenge as the country imports nearly 90% of its crude oil requirements. The combined impact of rising crude prices, higher shipping costs, and potential supply disruptions through the Strait of Hormuz has added pressure on the currency and financial markets.

Market participants also noted that Russia has reportedly proposed supplying oil to compensate for potential shortfalls from West Asian producers. However, analysts warned that accepting such proposals could trigger geopolitical complications, including the possibility of higher tariffs or trade measures from the United States.

The sharp volatility in the rupee and domestic equity markets has been largely attributed to concerns over energy supply disruptions and trade flows, particularly as shipping movements in the Gulf region have slowed amid the escalating conflict.

Why is rupee sinking today? Reason explained

Aditya Bhagchandani — Mon, 02 Mar 2026 04:21:42 +0000

Monday, March 2 — The Indian rupee weakened sharply in early trade, slipping more than 20 paise to Rs 91.25 against the US dollar, compared to its previous close of Rs 90.98. The fall comes amid escalating geopolitical tensions involving the US, Israel and Iran, which have triggered a surge in global crude oil prices.

Crude surge weighs on rupee

Crude oil prices jumped toward $76 per barrel after the latest developments in West Asia intensified fears of supply disruptions. Reports of attacks over the weekend and concerns around the Strait of Hormuz — a key global oil transit route — have heightened volatility in energy markets.

For India, higher oil prices are a significant negative. The country imports nearly 89% of its crude oil requirements, making the rupee sensitive to spikes in global energy costs. Rising crude increases India’s import bill, widens the current account deficit and puts downward pressure on the domestic currency.

Technical levels in focus

According to market participants, the 90.80–91.00 zone is now seen as a key support area for the rupee. A sustained breach above this level could open the door for a move toward 91.80–92, depending on global risk sentiment and crude price trends.

RBI action awaited

Traders are closely monitoring the Reserve Bank of India (RBI) for possible intervention. The central bank was reportedly active in the forex market in previous sessions to prevent the rupee from sliding beyond the Rs 91 level. Any further weakness may prompt additional action to curb excessive volatility.

With crude prices and geopolitical headlines driving sentiment, the rupee is likely to remain sensitive to developments in the coming sessions.

Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.

Pound slips below $1.36 as UK inflation cools to 3.0%, rate cut bets intensify

Aditya Bhagchandani — Wed, 18 Feb 2026 09:05:35 +0000

The British pound traded below $1.36 on Wednesday as investors digested softer inflation and labor market data, reinforcing expectations that the Bank of England could begin cutting interest rates in the coming months.

Data released by the Office for National Statistics (ONS) showed that the UK’s annual inflation rate slowed to 3.0% in January, down from 3.4% in December and marking the lowest reading since March 2025. The moderation was largely driven by slower increases in transport and food prices.

Core inflation, which excludes volatile items such as energy and food, also eased to 3.1%, its lowest level since August 2021, indicating broader price pressures may be cooling.

The inflation figures followed a softer-than-expected labor market report released a day earlier. Average weekly earnings, including bonuses, rose 4.2% in the three months to December, the slowest pace since the period to August 2024 and below market expectations. Meanwhile, the unemployment rate climbed to 5.2%, the highest level since early 2021.

Following the data, traders ramped up expectations of monetary easing. Markets are now fully pricing in a 25-basis-point rate cut by April, with a 76% probability of a move as early as March. Two rate cuts are also fully priced in by November, reflecting growing confidence that policy could shift as inflation trends lower.

Thai baht and Malaysian ringgit lead Asian FX gains; yen, Taiwan dollar edge higher while won slips

Aditya Bhagchandani — Mon, 09 Feb 2026 02:24:05 +0000

Asian currencies traded mixed against the US dollar in early Monday trade, with the Thai baht and Malaysian ringgit emerging as the top performers amid subdued regional moves and cautious dollar positioning.

The Thai baht strengthened to 31.393 per dollar from 31.48 in the previous session, marking a gain of around 0.28%. The Malaysian ringgit posted the strongest move in the region, rising to 3.925 per dollar from 3.945, reflecting a gain of about 0.51%.

The Japanese yen also edged higher, with the dollar slipping to 156.72 yen from 157.20 previously, as markets digested political developments in Japan and adjusted positioning ahead of key US economic data. Similarly, the Taiwan dollar firmed modestly to 31.605 per dollar compared with 31.678 in the prior session.

In contrast, the South Korean won weakened slightly, with the dollar rising to 1,465.7 won from 1,463, marking a decline of around 0.18%. The Singapore dollar traded marginally softer at 1.271 per dollar, compared with 1.2707 previously.

Other regional currencies showed limited movement. The Philippine peso strengthened modestly to 58.468 per dollar from 58.554, while the Indonesian rupiah was largely unchanged at 16,860 per dollar. The Indian rupee remained flat at 90.655 against the greenback.

Overall, Asian foreign exchange markets remained range-bound, with selective strength in the baht and ringgit standing out amid cautious sentiment ahead of upcoming US macroeconomic releases and evolving global risk cues.

Asian currencies mixed today: yen up 0.3%, ringgit gains 0.5% while won slips 0.2% against U.S. dollar

Aditya Bhagchandani — Mon, 09 Feb 2026 02:22:24 +0000

Asian currencies traded mixed against the U.S. dollar in early trade on Monday, reflecting cautious positioning ahead of upcoming U.S. economic data and ongoing shifts in global risk sentiment.

The Japanese yen strengthened to 156.72 per dollar, rising about 0.3% from the previous session, supported by firm equity markets in Japan and expectations that domestic political developments could keep policy conditions accommodative for now.

The Taiwan dollar also edged higher to 31.605, while the Thai baht gained to 31.393, tracking improved regional risk appetite. The Philippine peso inched up to 58.468, extending mild gains seen in recent sessions.

In contrast, the South Korean won weakened slightly to 1,465.7 per dollar, underperforming peers despite a sharp rally in local equities, as currency markets remained sensitive to U.S. rate expectations. The Singapore dollar was marginally lower at 1.271, reflecting a broadly steady U.S. dollar tone.

The Indian rupee and Indonesian rupiah were largely unchanged at 90.655 and 16,860, respectively, indicating limited near-term triggers. Meanwhile, the Malaysian ringgit outperformed with a 0.5% gain to 3.925, benefiting from improved regional sentiment.

Overall, Asian FX moves remained measured, with traders balancing a slightly firmer risk backdrop against uncertainty over the U.S. Federal Reserve’s policy path and upcoming macroeconomic data.

Why is the Indian rupee falling 92 against US dollar? Explained

Aditya Bhagchandani — Thu, 29 Jan 2026 04:00:03 +0000

The Indian rupee has slipped to record low levels near 92 against the US dollar, pressured by a combination of external shocks, trade-related concerns, and strong dollar demand. The decline marks one of the sharpest phases of weakness for the currency in recent years.

1. US tariff shock on Indian exports

The most immediate trigger behind the rupee’s recent fall has been steep tariffs imposed by Donald Trump on Indian merchandise exports to the United States, India’s largest export market. The move has raised concerns over export earnings, trade balance pressures, and potential disruptions to dollar inflows.

With exporters facing higher costs and reduced competitiveness, markets have priced in a weaker external position for India, weighing on the rupee.

2. Strong US dollar globally

The rupee’s decline is part of a broader emerging market currency sell-off, driven by a sharp rise in the US dollar. Safe-haven demand has pushed global investors toward the dollar amid geopolitical uncertainty and concerns over global growth.

A stronger dollar typically pressures currencies like the rupee by making imports costlier and increasing demand for dollars from oil companies and importers.

3. Widening trade and current account pressures

India remains a net importer, particularly of crude oil, gold, and electronic goods. Elevated commodity prices and a weaker rupee increase the country’s import bill, adding pressure to the current account balance and increasing dollar demand in the domestic market.

4. Portfolio outflows and risk aversion

Foreign investors have turned cautious amid global uncertainty and trade-related risks. Reduced foreign portfolio inflows or outright outflows from Indian equities and bonds have limited dollar supply, further weakening the rupee.

5. RBI intervention focused on smoothing volatility

Traders said the Reserve Bank of India likely intervened in the foreign exchange market as the rupee approached the psychologically important 92-per-dollar level. However, the central bank’s action appears aimed at slowing volatility rather than defending a specific level, allowing the currency to adjust to external pressures.

6. Psychological levels and momentum selling

Once the rupee breached previous record lows, technical selling and momentum-driven trades accelerated the fall. The move toward the 92 level triggered stop-losses and fresh dollar buying, amplifying intraday weakness.

Bottom line

The rupee’s fall is being driven primarily by external factors, including US trade actions, global dollar strength, and rising risk aversion, rather than domestic macro instability. While RBI intervention may help smooth sharp swings, the currency’s direction will remain sensitive to global trade developments, capital flows, and dollar movement in the near term.

Rupee hits record low of 92 against US dollar

Aditya Bhagchandani — Thu, 29 Jan 2026 03:56:52 +0000

The Indian rupee slipped to a fresh all-time low of 92.00 against the US dollar in early trade on Thursday, extending its recent losing streak and marking the third record low in less than a week.

On Wednesday, the rupee had already weakened sharply, depreciating 31 paise to settle at 91.99 against the dollar. Earlier in the week, the currency briefly recovered from record levels and closed 22 paise higher at 91.68 on Tuesday, but the rebound proved short-lived.

The rupee has remained under sustained pressure after Donald Trump imposed steep tariffs on Indian merchandise exports, targeting shipments to the United States, India’s largest export market. The tariff move has weighed on market sentiment, increasing concerns over export competitiveness and foreign capital flows.

Traders said the Reserve Bank of India (RBI) likely intervened in the foreign exchange market ahead of the local spot session on Thursday. The intervention was aimed at curbing excessive volatility as the rupee approached the psychologically significant 92-per-dollar level.

According to a trader at a foreign bank, the central bank’s action appeared focused on slowing the pace of depreciation rather than defending any specific level, as global dollar strength and external pressures continue to weigh on emerging market currencies.

With the rupee hovering near record lows, market participants remain cautious, closely tracking global trade developments, capital flows, and further signals from the central bank.

Forex rates today: Euro slips, yen weakens while Aussie and kiwi dollar gain

Aditya Bhagchandani — Wed, 21 Jan 2026 07:56:19 +0000

Major currency pairs traded mixed in early Asian hours, with the euro and Japanese yen under pressure, while commodity-linked currencies such as the Australian dollar and New Zealand dollar posted modest gains.

The euro slipped against the U.S. dollar, with EUR/USD trading around 1.1717, down 0.07%, reflecting cautious sentiment amid lingering concerns over economic growth in the euro zone. The single currency also weakened against the yen, with EUR/JPY falling 0.19% to 185.03.

The Japanese yen remained weak, as USD/JPY declined 0.16% to 157.90, staying close to recent multi-decade lows. Persistent yield differentials between the U.S. and Japan continue to weigh on the yen, keeping it vulnerable despite periodic intervention warnings from Japanese authorities.

The British pound edged higher against the dollar, with GBP/USD rising 0.04% to 1.3442, supported by lingering expectations that U.K. interest rates may stay higher for longer following recent inflation data.

Among emerging and safe-haven currencies, the U.S. dollar strengthened slightly against the Swiss franc, with USD/CHF up 0.24% to 0.7914, while the greenback also gained marginally against the Canadian dollar, trading near 1.3834.

Commodity currencies outperformed, with the Australian dollar climbing 0.33% to 0.6753 against the U.S. dollar, while the New Zealand dollar advanced 0.36% to 0.5849, tracking improved risk sentiment and firmer commodity prices.

Meanwhile, the U.S. dollar continued its gradual rise against the Turkish lira, with USD/TRY trading near 43.29, reflecting ongoing inflation and monetary policy challenges in Turkey.

Forex markets remain sensitive to global macro cues, including central bank policy expectations, geopolitical developments, and upcoming economic data releases, which are likely to drive near-term currency movements.

Rupee hits all-time low of 91.18 against US dollar: Here’s why

Aditya Bhagchandani — Wed, 21 Jan 2026 04:28:01 +0000

The Indian rupee slipped to a record low of 91.18 against the US dollar on Wednesday, January 21, extending its recent weakness as global risk sentiment deteriorated sharply.

Global risk-off mood weighs on rupee

The immediate trigger behind the fall was heightened geopolitical tension linked to Greenland, which has raised fears of renewed US–Europe trade friction. These developments pushed global investors toward safe-haven assets such as the US dollar, strengthening the greenback across the board and pressuring emerging market currencies, including the rupee.

Dollar strength adds to pressure

The US dollar remained firm as investors reassessed global growth and geopolitical risks. A stronger dollar typically leads to capital moving away from riskier assets, resulting in outflows from emerging markets and increased demand for dollars, which weakens local currencies like the rupee.

Rupee’s existing vulnerabilities amplified

Currency traders pointed out that the rupee was already under strain, making it more vulnerable to global shocks. Compared with several Asian peers, the rupee has been relatively sensitive to sudden shifts in risk sentiment, causing sharper reactions during periods of global uncertainty.

RBI intervention limited the damage

Market participants indicated that Reserve Bank of India was present in the market to smooth volatility. However, persistent dollar demand and the global risk-off environment meant that intervention could only slow, not reverse, the rupee’s decline.

What to watch next

Analysts said the rupee’s near-term movement will remain closely linked to global developments, including geopolitical headlines, US dollar strength, and risk appetite across financial markets. Any easing in global tensions or moderation in the dollar could offer temporary relief, while continued uncertainty may keep the rupee under pressure.

In the coming sessions, traders will also track overseas flows, crude oil prices, and central bank cues for further direction in the currency.

Indian rupee weakens further, slips toward record low of 91.08 against US dollar

Aditya Bhagchandani — Tue, 20 Jan 2026 04:59:43 +0000

The Indian rupee weakened further on Tuesday, January 20, moving closer to its record low level of 91.08 against the US dollar, as sustained dollar demand and continued foreign fund outflows pressured the domestic currency.

In early trade, the rupee depreciated by 8 paise to 90.98, weighed down by strong dollar buying from metal importers and persistent selling by foreign investors. Forex traders said that heightened geopolitical uncertainty and renewed expansionary signals from the US have increased global risk aversion, keeping emerging market currencies under pressure.

The rupee opened at 90.91 at the interbank foreign exchange and gradually lost ground to trade at 90.98 against the greenback, compared with its previous close. Weakness in domestic equities has further added to the pressure, with foreign capital continuing to exit Indian markets.

On Monday, the rupee had already fallen 12 paise to close at 90.90, hovering near its record low closing level of 90.93. The domestic currency had earlier touched its lowest-ever intra-day level of 91.14 on December 16, 2025.

Market participants noted that unless global risk sentiment improves or foreign flows stabilise, the rupee could continue to remain volatile near record low levels in the near term.

Why is Rupee depreciating to 90.98 against dollar? Know More

Aditya Bhagchandani — Tue, 20 Jan 2026 04:33:00 +0000

The Indian rupee depreciated by 8 paise to 90.98 against the US dollar in early trade on Tuesday, weighed down by strong dollar demand from metal importers and continued foreign fund outflows. Weak domestic equity markets and rising global uncertainty further pressured the local currency.

At the interbank foreign exchange market, the rupee opened at 90.91 and slipped to 90.98 against the greenback, compared to its previous close of 90.90. On Monday, the rupee had already weakened by 12 paise, ending close to its record low closing level. The currency had earlier touched its lowest intraday level of 91.14 on December 16, 2025, while its lowest closing level stood at 90.93.

Forex market participants said risk aversion remains elevated amid geopolitical uncertainty and global policy developments. Global markets are currently in a risk-off mode, with investors moving towards safe-haven assets such as gold and silver. The dollar index, which tracks the US currency against a basket of six major currencies, was trading 0.44% lower at 98.95. Meanwhile, Brent crude prices edged up 0.11% to USD 64.01 per barrel in futures trade.

On the equity front, domestic markets opened lower, with the Sensex declining 311.33 points to 82,934.85, while the Nifty slipped 99.5 points to 25,486. According to exchange data, foreign institutional investors sold equities worth Rs 3,262.82 crore on Monday.

Rupee hits record low of 90.56: Top 3 reasons behind the sharp fall — explained

Aditya Bhagchandani — Fri, 12 Dec 2025 04:35:21 +0000

The rupee slipped to a fresh all-time low of 90.56 against the US dollar on Friday, December 12, extending its recent losing streak as pressure intensified across global and domestic markets. Despite intermittent RBI intervention, the currency weakened through the morning session, driven primarily by three key forces.

Here are the top three reasons behind the rupee’s latest record low:

1. Persistent foreign investor outflows

Foreign Institutional Investors (FIIs) continued to pare exposure to Indian assets, turning into a major drag on the rupee. Data shows FIIs sold ₹2,020.94 crore worth of equities on Thursday (December 11) alone, with total outflows touching nearly $2.5 billion this month across stocks and debt.
Such sustained selling reduces the supply of dollars in the market and increases demand, directly pressuring the rupee. Dealers say the intensity of outflows reflects caution around global risk appetite and shifting investor positioning toward safer assets.

2. Heavy dollar demand from importers

Importers—particularly in sectors linked to precious metals and commodities—stepped up dollar purchases as international prices continued climbing. This surge in corporate dollar buying tightened liquidity further and accelerated the rupee’s decline.
With import bills rising, companies rushed to hedge or secure near-term dollar requirements. Traders noted that aggressive demand from these segments pushed the currency deeper into uncharted territory, even as the RBI attempted to smooth volatility.

3. Mixed global cues and a firmer dollar index

Global market sentiment remained uncertain, providing little support to emerging-market currencies. The US dollar index edged up to 98.37, adding strength to the greenback, while major Asian currencies traded mixed.
Brent crude futures also rose nearly 0.7%, adding to India’s external pressure. Although expectations of a softer Fed stance have cooled the dollar in recent weeks, overall risk appetite remains fragile, and investors continue to favour the dollar during periods of uncertainty. This external backdrop amplified the rupee’s weakness.

Despite these pressures, domestic equities opened in positive territory, but currency markets continue to signal caution. With global cues still volatile and outflows ongoing, the rupee remains vulnerable to further swings in the near term.

Rupee hits record low of 90.52 against US dollar as global storm, not domestic weakness, drives the slide

Aditya Bhagchandani — Fri, 12 Dec 2025 03:39:36 +0000

The Indian rupee slipped to a record low of 90.52 per US dollar, sparking a wave of concern across markets. But analysts stress that the currency’s sharp fall is being shaped more by global macro headwinds than by any cracks in India’s economic fundamentals.

According to research by Bank of America (BofA), the rupee’s decline is closely aligned with a broader retreat from emerging markets rather than any structural deterioration at home. Foreign investors have cut exposure to EM assets in recent months, resulting in weaker portfolio equity inflows and subdued foreign direct investment — diminishing a key support pillar for the currency.

At the same time, the Reserve Bank of India (RBI) intensified its defence of the rupee. BofA estimates the central bank has sold around USD 65 billion across spot and forward markets to curb volatility. The intervention, coupled with already-soft inflows, tightened rupee liquidity and inadvertently amplified pressure on the currency.

Global sentiment, meanwhile, turned sharply risk-averse. A strengthening US dollar, cooling trade flows, and new tariff actions unsettled global markets, pushing emerging-market currencies lower across the board. In this environment, the rupee’s fall appears to be collateral damage of global contagion, not a sign of domestic instability.

Despite the drop, BofA notes that India’s macro fundamentals remain resilient. Economic growth continues at a steady pace, inflation has moderated, and the current account does not signal immediate stress. The firm characterizes the rupee’s weakness as stemming from “weaker capital flows, lower net inflows and a negative sentiment impulse,” rather than domestic fragility.

Looking ahead, BofA remains optimistic. The brokerage expects 2026 to bring a moderation in global turbulence — led by a potential US slowdown, a softer dollar, and improved international trade sentiment. Under such conditions, the rupee could recover toward 86 per dollar, the report suggests.

For now, the fresh record low serves as a reminder of one truth:
the rupee is being tossed by global winds far more than domestic storms.

Rupee hits a fresh record low of 90.47 against the US dollar – Know More

Aditya Bhagchandani — Thu, 11 Dec 2025 08:26:26 +0000

The Indian rupee slipped to a new record low of around 90.47 per US dollar, marking one of its sharpest bouts of weakness in recent months. While the fall triggered concern across markets, analysts point out that the slide is not driven by domestic instability but by powerful global forces that have simultaneously pressured emerging-market currencies.

Research by Bank of America (BofA) suggests that the rupee’s decline mirrors a deeper global shift rather than any structural deterioration at home. Foreign investors trimmed exposure to emerging markets, slowing both portfolio equity inflows and foreign direct investment, leaving India with weaker capital support.

At the same time, the Reserve Bank of India (RBI) intensified its defence of the currency. According to BofA’s estimates, the central bank sold around USD 65 billion across spot and forward markets in an effort to curb volatility. This heavy intervention, combined with already-soft inflows, tightened rupee liquidity and magnified downside pressure.

Global sentiment turned sharply risk-averse just as the US dollar strengthened, trade flows cooled, and new tariff actions unsettled markets. In this environment, the rupee’s weakness appeared more like global collateral damage than a sign of domestic stress.

Despite the currency movement, BofA highlights that India’s macro picture is broadly resilient. Growth momentum continues, inflation has moderated, and the current account is not flashing red. The rupee’s fall, therefore, reflects “weaker capital flows, lower net inflows and a negative sentiment impulse,” pointing to external shocks rather than internal fragility.

BofA remains constructive on the medium-term outlook. The firm expects 2026 to bring a cooling in global turbulence — led by a potential slowdown in the US, a softer dollar, and a gradual improvement in global trade sentiment. If these conditions materialize, India stands to benefit, with BofA projecting the rupee could strengthen toward 86 per US dollar.

For now, the rupee’s new low underscores a simple reality: the currency is reacting less to what is happening in India, and more to the shifting weather of the global economy.

RBI Governor says India’s forex reserves stand at $686 billion as of November 28

Aditya Bhagchandani — Fri, 05 Dec 2025 04:46:34 +0000

India’s foreign exchange reserves rose to $686 billion as of November 28, RBI Governor Shaktikanta Das said during the monetary policy briefing. The Governor highlighted that the sustained buildup in reserves strengthens India’s external sector stability and provides a stronger buffer against global financial volatility.

The robust reserve position comes amid the RBI’s ongoing efforts to manage currency fluctuations, including its recently announced $5 billion USD swap and continued market interventions to ensure orderly conditions in the forex market.

The Governor reiterated that India’s external metrics remain healthy, supported by resilient services exports and steady remittance inflows, even as merchandise exports face global headwinds.

Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Economic conditions and external sector indicators are subject to change. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.

Rupee hits fresh record low today, crosses Rs 90 against the US Dollar

Markets Desk — Wed, 03 Dec 2025 03:37:29 +0000

The Indian rupee opened at a record low of ₹ 89.97 per US dollar on Wednesday and quickly slid further to around ₹ 90.14, underscoring intense pressure on the currency.

This sharp fall follows two days of steep depreciation. On Monday, despite a strong 8.2 % GDP print for Q2, the rupee crashed to record lows — hitting around ₹ 89.76–89.83 before slipping past prior lows of ₹ 89.49. On Tuesday, it closed near ₹ 89.95/US$, its weakest-ever finish.

Analysts attribute the slide to a toxic mix of heavy dollar demand from importers, a widening trade deficit, sluggish foreign-portfolio inflows, growing global uncertainty and a lack of progress on the US–India trade agreement. The mood has been worsened by maturing non-deliverable forward (NDF) positions and speculative dollar demand.

Despite strong domestic growth and buoyant equity markets, those fundamentals have failed to bolster the rupee — which remains among Asia’s worst-performing currencies this year. The growing pressure has forced Reserve Bank of India (RBI) to intervene, but market participants warn that renewed depreciation — possibly breaching the psychologically crucial ₹ 90 per dollar mark — cannot be ruled out if outflows and external imbalance persist.

Rupee hits fresh record low of 89.85 against US dollar on Tuesday

Aditya Bhagchandani — Tue, 02 Dec 2025 04:04:31 +0000

The Indian rupee slipped further in early trade on Tuesday, opening near its all-time low amid persistent strength in the US dollar. The currency weakened 14 paise to 89.70 at the open, just a shade away from its new lifetime low of 89.85 against the greenback.

The rupee had already hit a record 89.78 on Monday before settling at 89.56 in the previous session. Early data shows USD/INR hovering around 89.76, signalling continued pressure from firm US yields and steady dollar demand from importers.