Overview
- The rupee slipped past the 96-per-dollar mark, falling to an intraday low near 96.23 and closing about 96.20 on Tuesday before a modest bounce to roughly 96.11 in early Wednesday trade.
- Renewed US–Iran hostilities raised supply fears for oil, lifting Brent toward the mid-$80s and strengthening the dollar as U.S. 10-year yields rose, which pushed foreign investors into safer assets and pressured the rupee.
- Foreign institutional investors sold Indian equities (about Rs 739.69 crore reported for Tuesday), reflecting capital outflows that added to the currency’s weakness.
- The Reserve Bank of India intervened by selling dollars in forward markets and its special FCNR(B) swap facility has drawn about $10 billion in recent weeks, measures that market participants say helped curb a deeper slide.
- Analysts expect the rupee to trade in a narrow near-term band (roughly 95.9–96.5 or 96–97) and say the currency’s direction will hinge on oil prices, U.S. yields and the pace of foreign flows, with higher oil costs likely to widen India’s import bill and raise vulnerability.