Rupee Rides the Waves: Sharp Swings Subside as Markets Watch for the Next Big Move

After braving its steepest two-week fluctuations since the start of 2023, the Indian rupee is finally having a breather, steadying around 85.61 against the US currency as of Wednesday morning. The realized volatility of the currency reached almost 6%—a position it had last held more than two years ago—following a maelstrom of US tariff releases, international trade tensions, and a go-slow strategy adopted by the Reserve Bank of India (RBI).

 

Key Highlights:

Even though calm prevails currently, currency markets are extremely sensitive to developments in global trade, particularly as the US and China ratchet up tariff threats and the performance of the Chinese yuan affects regional sentiment.

 

For the moment, the rupee has a time of stability, but speculators are watchful for the next round of global shocks.

 

Source: Reuters, Economic Times, Business Standard