Overview
- India’s rupee, which sank to 95.34 per dollar on Thursday, set a new intraday low before trimming losses after suspected Reserve Bank of India dollar sales.
- Brent crude spiked to about $126 a barrel during the day as tensions around the Strait of Hormuz worsened, and India’s heavy oil import reliance quickly lifted dollar demand.
- Foreign investors have pulled more than $20 billion from Indian equities this year, including large April sales, and those exits increase demand for dollars as funds move money out.
- The RBI has focused on curbing sharp swings rather than defending a set rate, after recent steps that capped banks’ net open rupee positions and temporarily restricted rupee derivatives.
- Analysts warn the currency could slide toward 96–97 if oil stays near $125 and the Hormuz disruption persists, with the Fed holding rates steady and higher US yields adding to outflow pressure and inflation risks at home.