The rupee slipped to ₹96.12 per dollar, a 0.5% drop from yesterday’s ₹95.96, marking its first dip since 95.80 earlier this month. RBI’s latest policy statement left the key repo rate unchanged at 6.5%, signaling a pause before a possible tightening cycle.
US Treasury yields climbed to 4.5% on the 10‑year, nudging the Fed closer to a 4½% terminal rate. The parallel rise in Indian inflation, now at 5.1% YoY, has prompted RBI analysts to keep a hawkish stance.
Manufacturing PMI rose to 58.2 in March, the highest in two years, while export orders grew 12% YoY, suggesting that an orderly rupee depreciation could boost competitiveness. However, global supply chain hiccups and the ongoing El Niño have kept volatility in check.
Looking ahead, RBI is expected to hike rates by 25 basis points in the June meeting if inflation stays above the 4% target. Traders should monitor the upcoming inflation report on May 30, which could trigger a sharper rupee swing.
US Fed officials hint at two more rate hikes this year, potentially tightening global liquidity. The rupee’s near‑level to the dollar may hold until market sentiment shifts on the Fed’s policy path.