Rupee Slides Past 86 per Dollar on Yuan Slump
Why in the news
A weak yuan, dollar buying by importers and FPI selling pushed the rupee lower just before the RBI policy meeting.
Key facts
- Rupee: ₹86.26/$ on Tuesday against ₹85.86; Monday had fallen 0.7%.
- Yuan: weakest since September 2023, as the People’s Bank of China was seen tolerating depreciation against US tariffs.
- Threatened 50% tariff on Chinese goods lifted safe-haven dollar demand.
- Oil at a four-year low led Indian oil firms to buy more dollars.
Indicators
| Indicator | Reading |
|---|---|
| Dollar index | 103.27 (102.75 before) |
| US 2-yr and 10-yr yields | Up 22-24 bps |
| Expected rupee level | Near ₹85.50/$, downside risks |
Exam angle
- MPC was expected to cut repo by 25 bps to 6.00%; terms: dollar index, FPI outflow.