India’s Reserve Bank (RBI) has signaled strong support for the Indian Rupee (INR), which has rebounded against the USD after a sharp decline in global oil prices. As oil prices fell sharply due to geopolitical tensions, the INR experienced a near-record correction, suggesting renewed confidence among traders. The RBI’s intervention via offshore and non-deliverable forwards (NDFs) aimed to counteract the persistent bearish bias, while FIIs’ net losses underscored concerns over India’s energy sector. However, recent fluctuations in US Treasury yields and inflation expectations have raised questions about the long-term viability of the INR. A moderate rise in the HSBC Composite PMI indicates ongoing economic resilience, though challenges persist in managing inflation and balancing growth with foreign demand. The Indian economy’s reliance on oil imports and rising government payments have intensified volatility, making currency stability a critical factor for investors.
