Overview

• The rupee saw its worst single-day drop in a month on May 8, plunging 1.5% against the US dollar after India struck terror camps in Pakistan.
• By the week ending May 9, the rupee had declined 0.9%, reflecting heightened market concerns over the intensifying India-Pakistan conflict.
• The Reserve Bank of India intervened through state-run banks on May 9, helping the rupee recover 17 paise to settle at 85.41 per US dollar.
• A resurgent US dollar index above 100, rising crude oil prices, and geopolitical uncertainty continue to exert downward pressure on the rupee.
• India-Pakistan hostilities, marked by drone and artillery exchanges, represent the worst cross-border fighting in nearly three decades.