Oil pangs, FX swap window closure drags Indian rupee to two-week low

According to Business Recorder, the Indian rupee slid to a two-week low on Monday, closing at 95.6025 per dollar after shedding 0.2%. Traders said the Reserve Bank of India was likely to have stepped in, which kept the decline from being steeper. Weaker sentiment added pressure after the central bank moved its end date for a discounted currency swap window for overseas deposits forward by a month.

Crude oil was another drag, as Brent futures gained close to 1% to reach $89.2 a barrel amid stalled diplomacy over Middle East tensions. No major supply outages were reported, which limited the rise. Policy measures have nonetheless drawn in nearly $57 billion and pushed foreign exchange reserves to a four-month peak above $700 billion, according to the report.

BMI analysts project the rupee weakening to 97 at the close of March 2027 and 99 at the close of March 2028, citing the US-Iran conflict as a drag. They do not expect authorities to push the currency higher through direct market intervention, and see efforts focused on curbing volatility instead.