The rupee slipped 12 paise to 95.95, inching closer to the 97‑level that analysts flag as a critical threshold.
Anindya Banerjee, Kotak Securities’ Head of Currency Research, highlighted that FPI outflows hit $6.1 bn this month, while roughly 90% of the two‑month net inflow has already been withdrawn.
Oil‑related import costs are tightening the currency. Diesel and aviation fuel prices, pushed up by global refinery bottlenecks, have swollen India’s import bill and fed inflationary pressure, Banerjee noted.
The RBI’s stance appears to lean toward tightening. Banerjee expects at least one rate hike this year, with a potential December increase, citing a liquidity cushion from recent foreign‑currency inflows.
Global 10‑year yields remain elevated, especially in the U.S., and the rupee’s trajectory will be sensitive to any tightening abroad. If energy prices stay high, the RBI may need to intervene to stem further depreciation.