The Rupee: Amid geodynamic turbulence, the Indian currency slides to 96.34/USD
Virendra Pandit
New Delhi: As West Asia fears regathering of the war clouds, surging global bond yields, elevated energy prices, and the resultant geoeconomic turbulence, the Indian rupee on Monday hit a fresh low of 96.34 per US dollars, the media reported.
With this fresh slide, the Indian currency has slumped 2 per cent over the last seven trading sessions. Traders said the losses would have been steeper if not for market interventions by the Reserve Bank of India.
The rupee fell to 96.3875 per dollar, eclipsing its previous all-time low of 96.1350. It ended the session at 96.3450, down 0.4 per cent from its closing level on Friday last week.
Hitting a record low on Monday, it slid for the seventh consecutive trading session, as a jump in global bond yields converged with elevated energy prices and deepened the strain on Asia’s worst-performing currency of the year so far.
Elevated energy prices and weak capital flows have left India staring at a third consecutive fiscal year of a deficit in its balance of payments (BoP), straining the rupee. Some economists have forecast a BoP deficit of around USD 65 billion in 2026-27.
Overseas investors have sold over USD 23 billion of local stocks and bonds on a net basis since March 2026, hurting the capital account at a time when the current account is stressed by elevated import prices.
Global impact
Soaring energy prices from the nearly-frozen Iran war have fanned inflation fears and prompted wagers on rate hikes by global central banks, knocking down bonds from Tokyo to New York and other key markets.
Yields on the US’ 10-year notes hit a 15-month high of 4.631 per cent, Japan’s 10-year yield hit its highest since 1996, and their Indian counterpart climbed 6 bps. Efforts to end the Iran war appeared to have stalled following a drone strike at a nuclear power plant in the United Arab Emirates as potential revival of the US-Israel air strikes on Iran scared the world.
Brent futures hovered around USD 110 per barrel.
