Rupee Dips Below 96 vs USD Amid Global Turmoil
The Indian rupee has continued its downward trend, slipping about 0.2% to 95.9825 against the US dollar on Monday, despite reported central bank interventions. The decline is attributed to the impact of the recent equities bloodbath, which saw D-Street gauges slump to their lowest in FY27, as well as surging US bond yields and crude oil prices that are affecting currencies and growth assets across Asia Pacific.
The rupee has resumed its losing streak despite a strong response from diaspora funds, slumping to 96.34 in the offshore non-deliverable forward (NDF) market. This pressure is reflected in the morning trade in the Mumbai spot market, with forex consultant KN Dey noting that the spot rupee touched 95.99 intra-day, marking its lowest level in over a week.
The Reserve Bank of India's (RBI) likely intervention has prevented the currency from breaching the 96 mark, according to traders. Economists have predicted that the rupee could grind lower against the dollar this fiscal year, contrary to central bank expectations of a turnaround in fortunes. This is due to high oil prices and US bond yields stoking inflationary expectations.