Rupee Nears 96 to a Dollar

Mumbai: The Indian rupee touched a record intraday low of 95.96 against the US dollar on Thursday but trimmed losses during the session after the central bank stepped in selling dollars through nationalised banks and on reports that the government is considering a ⁠reduction in the taxes paid by foreign investors on the nation’s bonds.

At the interbank foreign exchange market, the rupee opened at 95.73 against the dollar, but fell to 95.96, eclipsing its previous record intraday low of 95.80 hit on Wednesday. It touched a high of 95.58 following reports that the RBI has recommended tax cuts to the government of India for foreign investors in the bond market. The domestic currency finally ended the session at 95.76, another historic low closing compared to its previous low of 95.70.

Meanwhile, the dollar index that gauges the greenback’s strength against a basket of six currencies was trading at 98.51, down by 0.01 per cent.

Brent crude price slipped below $106 per barrel, with traders closely watching the meeting between US President Donald Trump and Chinese President Xi Jinping, movements in US Treasury yields, and geopolitical developments surrounding the West Asia conflict.

According to Anil Kumar Bhansali, head of treasury at Finrex Trading Advisors, “The Rupee rose to 95.58 as RBI also sold dollars at 95.96.

Earlier during the day some Non-deliverable Forward positions were being liquidated which took the dollar-rupee towards 95.9625 its lowest level ever.”

“The market was expecting inflation in the vicinity of 4.40 per cent but when the data showed wholesale inflation rose to 8.30 per cent, the rupee fell from 95.58 to 95.75 levels almost immediately,” added Bhansali.

Elevated crude prices, alongside bulk selling by foreign investors from domestic markets continues to add pressure on the currency which has become the worst-performing currency in Asia for the year, registering a loss of over 6 per cent so far this year.

The lack of any visible resolution in the West Asia conflict continues to keep global investors on edge and maintain uncertainty across financial markets. Adding to these concerns, India’s wholesale inflation surged to a 42-month high of 8.3 per cent in April, raising fears of persistent inflationary pressures, margin stress and a potentially delayed rate-cut cycle by the RBI.

Foreign institutional investors have remained firmly in a risk-off mode amid escalating geopolitical uncertainty and global market instability, selling Rs two lakh crore from the equity market in 2026, much higher than the Rs 1.66 lakh crore pulled out during the entire 2025. In May alone they have dumped stocks worth Rs 14,231 crore so far as per the data with the NSDL.

“The Prime Minister’s austerity measures will definitely lead to some improvement in the rupee but will take time to show results as he delayed announcing them (after the elections). The rupee will remain in the 96 levels and I don’t expect it to fall to 100 levels,” said the treasury official of a public sector bank.