Rupee falls below ₹95 against USD for the first time
- 30th March 2026
- 04:40 PM
- 2 min read
Summary
The Indian rupee breached the 95 per dollar mark for the first time on 30 March, hitting an intraday low of 95.14 and closing at a record 94.83, down from the previous session's 94.81. The move marks a fourth consecutive weekly decline of roughly 1% and puts the currency on course for its worst fiscal year performance since 2011-12.30 March 2026 | 2 min read
Why has the rupee fallen to a record low?
The rupee has lost 4.4% against the US dollar in the March quarter. No single trigger is responsible. Several pressures have compounded over weeks:
Rising oil prices tied to the Middle East conflict, which directly inflates India’s import bill
Persistent capital outflows from Indian equity markets
Global trade frictions and geopolitical uncertainty
Corporate arbitrage between the onshore spot market and non-deliverable forwards, which added selling pressure on 30 March
The Middle East conflict has raised risks for India’s inflation and growth outlook, and those concerns are now feeding through to both the currency and bond markets.
What has the RBI done, and why does it matter?
After market hours on Friday, the Reserve Bank of India directed banks to cap their net open rupee positions in the onshore deliverable market at $100 million per business day, with the rule taking effect by 10 April.
Bankers have flagged that the short timeline could force disorderly unwinding of existing positions, with potential losses on arbitrage trades. On 30 March, the rupee opened higher before giving up those gains as corporates moved to exploit the spread between onshore and NDF rates, a gap the RBI’s directive was designed to close.
How are bond markets responding?
The 10-year benchmark bond yield crossed 7% for the first time in over 21 months on 30 March, reaching 7.0121%, the highest level for a 10-year paper since 5 July 2024, up from 6.9419% the previous session. Overnight index swap rates also faced fresh upward pressure.
Indian bonds are on track for their worst fiscal year since 2023. Equity markets face their worst monthly performance since March 2020.
Future outlook
Traders are preparing for continued volatility. Elevated oil prices are expected to keep bond yields under pressure. The RBI’s forex position cap adds a layer of uncertainty for banks managing currency exposure in the near term. India’s inflation and growth trajectory will remain sensitive to any further escalation in Middle East tensions.
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