The Indian rupee rebounded 20 paise from its record low of 95.73 against the US dollar on Thursday (May 14), as reported by CNBC TV18. The currency had staged a sharp recovery after earlier hitting the all-time low, strengthening nearly 20 paise from intraday lows. However, the currency could not sustain the gains and settled at the new record level, reflecting the persistent pressure from multiple factors including elevated crude oil prices and foreign portfolio outflows.
As reported by CNBC TV18, the Reserve Bank of India has recommended the move, which is considered by the Finance Ministry. According to the Bloomberg report, discussions around easing the tax burden have reportedly gained momentum as policymakers attempt to contain the rupee's depreciation. The potential tax cuts on foreign bond investments are aimed at attracting capital inflows and strengthening the rupee's position against the US dollar. These measures are being considered as authorities seek to align policies with global standards and boost inflows.
The rupee had come under sustained pressure in recent sessions due to elevated crude oil prices and persistent foreign portfolio outflows. According to CNBC TV18, the currency has fallen to record lows this week amid concerns that prolonged tensions linked to the Iran conflict could keep oil prices elevated and widen India's current account deficit. Earlier in the session, Brent crude hovered near $106 a barrel as investors tracked developments around the Iran conflict, with India importing nearly 90% of its crude oil requirements, making the rupee particularly vulnerable to spikes in global energy prices.
The rebound also lifted sentiment in banking and NBFC stocks, which pared losses and turned higher in trade, as reported by CNBC TV18. Analysts at ING had said any easing in geopolitical tensions or crude oil prices could provide relief to the rupee, which has remained under pressure from rising import costs and external account concerns. Brokerage Nomura had also said policymakers may consider additional measures in the coming months to support the external sector and curb pressure on the currency. The latest recovery reflects the ongoing challenges facing the rupee despite policy interventions.
