The Indian Rupee rebounded slightly after breaching 91/USD, matching India's country code +91: amid FII outflows and US tariff pressures. Markets eye Bank of Japan's potential rate decisions for global liquidity boost, hoping to aid INR stability and stock recovery.
Currency Volatility Context
The Rupee hit a record low of 91.14/USD on Dec 16, 2025, driven by $18B+ FII sell-offs, stalled US-India trade talks, and Trump's 50% tariffs on imports. Recent rebounds to 89.88 stem from RBI interventions and softer USD, but pressures persist with 6% YTD depreciation.
Key Highlights
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Rupee Triggers: FII exits ($17-18B in 2025), importer dollar hedging, US trade uncertainties; viral "+91" meme highlights public notice.
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BoJ's Potential Role: Rate hikes unwind yen carry trades, hurting EM flows; dovish stance or pause could inject liquidity, easing FII selling and supporting Nifty/Sensex.
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Market Impacts: Stocks volatile with 9% Nifty correction; weaker INR aids exporters/IT but raises import costs (oil, electronics).
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Outlook: RBI holds $600B+ reserves; trade deal key for sustained recovery, BoJ as "Santa" via loose policy.
Pragmatic watch on global cues.
Sources: Reuters, Economic Times, Trading Economics.