Overview

• The Indian rupee closed at 86.01 per US dollar on May 22, marking its lowest level since April 11, 2025.
• Rising US Treasury yields, with the 10-year yield climbing to 4.607%, and narrowing yield differentials are reducing the appeal of Indian assets.
• Elevated crude oil prices driven by geopolitical tensions in the Middle East are contributing to the rupee's depreciation.
• Foreign institutional investors have pulled out over ₹10,000 crore recently, adding to the downward pressure on the currency.
• Major banks, including Bank of America, predict the rupee could strengthen to 84 per dollar by December 2025, supported by improved capital inflows and a stable domestic outlook.