Indian Rupee Records Sharpest Single-Day Decline Since February 2023

The Indian rupee posted its biggest single-session drop in over two years, closing at 85.71 per U.S. dollar on May 8, down 1 percent from its previous close of 84.8250. The decline marks the steepest fall since February 2023, driven by geopolitical tensions and a strengthening dollar index.

 

Market analysts attribute the rupee’s depreciation to heightened concerns over India-Pakistan border tensions, which have weighed on investor sentiment. The dollar index also gained 0.3 percent, adding pressure on emerging market currencies. The Reserve Bank of India intervened through state-owned banks to limit losses, but the rupee still ended the day weaker.

 

The currency’s movement reflects broader global trends, with oil importers and hedgers increasing dollar demand. Spot USDINR is expected to trend upward, with analysts projecting a potential rise to 85.70 per dollar if key support levels hold.

 

Despite the decline, India’s bond market remained stable, with the benchmark 10-year government bond yield settling at 6.34 percent. Traders are adopting a cautious approach, awaiting further developments in geopolitical and trade negotiations.

 

Currency Market Highlights:

Sources: Business Standard, The Hindu BusinessLine, Economic Times, Moneycontrol, CNBC-TV18.