Mumbai, November 13, 2025
The Indian rupee staged a spirited rebound Thursday, clawing back to 88.50 against the US dollar in a session buoyed by the Reserve Bank of India's (RBI) aggressive $2 billion intervention, even as the benchmark 10-year government bond yield softened to 6.48% amid a welcome respite in global oil prices. The currency's 0.35% recovery from Wednesday's slump—its first green day in a week—eased jitters in export-heavy sectors like IT and textiles, while traders hailed the central bank's "timely torque" as a firewall against a potential slide toward 89 amid lingering US election aftershocks and Middle East flare-ups. With forex reserves holding steady at $688 billion, the RBI's spot and forward sales underscored its resolve to cap volatility, injecting a dose of stability into markets nursing a $1.5 billion FPI outflow this month.
The rupee's pivot came hot on the heels of a bruising 88.82 intraday low on November 12, triggered by a resurgent dollar index (DXY) at 107.80—fueled by safe-haven bids post-Trump's tariff teases—and Brent crude's stubborn perch above $84, which had bloated India's $150 billion annual import tab. But Thursday's script flipped: Oil prices tumbled 2.5% to $81.70 per barrel on OPEC+ signals of delayed output hikes and easing US inventory builds, trimming inflation fears and lightening the rupee's load. "The RBI's intervention was textbook—$1.2 billion in spot sales at 88.70, the rest in forwards to smooth the edges—pairing beautifully with oil's cooldown to deliver this snapback," dissected Sonal Varma, chief economist at Bank of Baroda, in a Bloomberg interview. "Expect the pair to consolidate around 88.30-88.60 this week, barring fresh DXY spikes."
Bond markets mirrored the thaw, with the 10-year G-Sec yield (7.18% 2033) shedding 4 basis points to 6.48%—its lowest since mid-October—on lighter supply auctions and hopes of a 25 bps repo cut at December's MPC meet. Foreign inflows trickled back, with $450 million in G-Sec buys offsetting recent equity jitters, as global yields (US 10-year at 4.32%) lost some steam post-Fed minutes hinting at measured hikes. "Yields below 6.50% open the door for fiscal borrowing without fireworks, a boon for infra bonds," noted a Kotak Mahindra trader, adding that easing oil could shave 20-30 bps off CPI by Q1 2026.
RBI Governor Shaktikanta Das, in a post-market statement, struck a measured tone: "Our actions today affirm commitment to orderly markets; volatility is managed, not magnified." The intervention—RBI's third this month, totaling $4.5 billion—drew from a playbook refined since the 2022 taper tantrum, blending dollar auctions with verbal guidance to temper speculation. Yet, shadows linger: A Reuters poll pegs a 60% chance of further sales if oil rebounds, while Trump's "America First" rhetoric risks 10-15% rupee pressure via trade frictions.
For India's $4 trillion economy, the relief is palpable: A stable rupee cushions remittance inflows ($100 billion yearly) and IT majors like TCS, whose Q2 forex hedges breathed easier. Equity benchmarks cheered too, with Sensex adding 0.8% to 84,500 on the currency tailwind. As Mumbai's trading floors wrapped with cautious optimism, Varma summed it: "RBI's $2B shield bought breathing room, but oil and DXY remain the wild cards. For now, 88.50 feels like solid ground." In a world of whiplash wires, Thursday's truce offers respite—but traders know: Currencies don't rest.
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