Rupee crashes past 95/$, logs worst annual fall in 14 years

Mumbai: The rupee on Monday slumped to breach the psychologically crucial barrier of 95/$, upending market expectations of a stronger year-end showing, as it finished FY26 by retreating the most in 14 years – nearly 11%.

The last month, coinciding with the Iran war, was particularly brutal and accounted for a 4% decline. The currency, which touched an all-time low of 95.21/$, had briefly advanced to 93.59/$ in the early hours, its strongest level on Monday. The trading amplitude for the unit was one of the widest Monday.

Intervention from the Reserve Bank of India (RBI) in the last 15 minutes of trading lifted the local currency to close at 94.83/$ on the last trading day of the year. It closed at 94.81/$ on Friday.

The rupee was widely expected to strengthen on Monday.

Rupee Seen Staying at 94-95 per Dollar

This was following Friday’s central bank directives to curb lenders’ open positions in FX to $100 million. However, high dollar demand from oil companies, importers and hedge funds caused the rupee to retrace its steps and trade at record lows, traders said.

“The curbs by RBI created an arbitrage between NDF and onshore rates. With simultaneous buying in the NDF market and selling in the domestic market, along with year-end dollar demand from oil companies and corporates, the rupee came under pressure,” said Anil Bhansali, head of treasury, Finrex Treasury Advisors.

The rupee is expected to remain between 94/$ and 95/$ on April 2, when the market opens after a 2-day holiday.

Currency markets are closed on March 31, April 1, and April 3, making this a short trading week.

The currency opened at 93.59/$ on Monday and depreciated continuously till about 3:15 PM to a low of 95.22/$. At these levels, dollar sales by the RBI helped trim losses, allowing the rupee to close slightly stronger.

“Push for dollars from oil companies, importers, hedge funds and corporates was very high due to sharp rupee appreciation in the morning,” said Kunal Sodhani, head of treasury at Shinhan Bank India.