Rupee At 96.06 Record Lows Again! Non-Stop Slide For Indian Rupee | Naveen Mathur On Key Reasons

追加: 2026-05-22

[00:00:00]Okay, thank you so much for that, Srishti. Uh let me bring on board Navin Mathur because the rupee has slipped to a fresh record low. Navin Mathur of Anand Rathi Share joining us this afternoon for that perspective. 96.06, Navin. Uh that slip on the rupee continues. Uh give us a sense. Uh you know, this has been a non-stop slide now. Can we continue to expect this to play through?

[00:00:25]Thank you very much, Harsh. As we speak, it is 96.21 to right now.

[00:00:32]From the yesterday's close of 95.768.

[00:00:35]Now, the the the fundamental reasons remain the same. There is a there's a pressure on the current account deficit.

[00:00:42]Uh the oil prices are continuing to be bid up because of those constraint on the Western Asia crisis, the Iran and everything which is making a havoc on the oil prices. So, I think overall trend per se because of the oil, because of the continued pressure on the FIIs uh outflows, the rupee definitely is uh depreciative. At the same time, the dollar is gaining strength. Means we are at around 98 99 uh for the dollar index. So, I think the dollar index strength, the internal uh uh problems with respect to the current account deficit because of the high oil prices uh uh the FII outflows continues. I would say that all these factors are definitely uh making uh pressure on the rupee and which is I think more to do with stubborn high oil prices and persistent outflows. So, that's where we are strained with respect to the rupee against the dollar. Right.

[00:01:42]Navin, I also want to talk about RBI and the policy response here because the RBI has been intervening to try and defend the rupee. Uh but reserves have been shrinking. Uh at what point does that intervention become counterproductive?

[00:01:57]And do you think a better strategy perhaps would be for the market to find its true value of the currency?

[00:02:03]It's a very difficult call at this particular point of time. You are rightly so that from 728 billion dollars of reserves before this started this war, I should say end of February, we are currently at around 690 or so billion dollars. So RBI has utilized around 38 billion dollars uh to to take care of the rupee depreciation against the dollar.

[00:02:30]I I would say that 28 billion dollars I think has been used in only one month which was March this year. So I would say that that the that RBI is looking forward they are fighting to control the depreciative stance but in spite the India position be little strong than the other countries still we are suffering because of the global macroeconomic environment on which we are dependent upon. So we see import about 85% of our crude oil from overseas. So that's one of the major factors where where the rupee and the rupee slide is I would say is continued to be seen.

[00:03:13]The other point which I would say is that the gold import duty has been high so that was something to cushion for the rupee slide as far as the outflow on the inflows are concerned for the dollars. I think the RBI and the government is cognizant about the fact but it's very difficult to say what level the rupee should settle down and therefore there has to be certain interventions not to have very strong slide on the downside.

[00:03:42]But if the conflict does drag on and we don't see a meaningful cool off Naveen on the oil prices which are still well above 100 dollars to a barrel, would 100 perhaps on the currency also be a realistic picture?

[00:03:55]Looks like to be now because if the Brent or the WTI continues to be 100 plus, as we speak, the WTI is at 104 and then 109 is what the Brent is and our basket seems to be at $150 for India. So, I think that pressure would continue to be there and if say for example the RBI doesn't intervene, there is a possibility of rupee finding a level of around 102 against the dollar.

[00:04:27]And and Naveen, of course, RBI likely to take certain action, but what's the sense like with regard to the government? What action and what measures can they take to stem the slide because obviously this is painful both ways.

[00:04:42]Yes, you're absolutely right. So, means one of the data points which I missed out earlier speaking about was the trade balance number. 259 was the last month.

[00:04:51]$259 billion was the last month trade number. This time it has come to around 200 283,000 something in terms of the dollar per million dollars. So, I think that is another pain point as far as the trade balance is concerned.

[00:05:07]But I think the RBI has a way of we have 11 months import cover as of now as where the forex reserves stand.

[00:05:15]And as RBI Harsh has already spoken out earlier, they're not defending any level, but they don't want the volatility of the rupee against So, what they are trying to manage is the volatility and they're not defending any levels of rupee. So, they also want the rupee to be stabilizing or finding its own way against the dollar and rupee has always found out the way. We have seen the crisis in 2013, again 2022, and again today, but then I think the rupee has found its way and it's not a far away time and I I don't think so that the rupee should not settle around 95-96 to find its way and consolidate where it should be. This is the fundamentals of India where we stand today.

[00:06:01]Even Naveen the other piece has been the consistent FI outflows, right? That's also been hurting the rupee. Any way in which we can stem the tide there at all?

[00:06:13]>> [clears throat] >> See the bond yield the spreads on the bond yield is one of the major factors plus the risk averse for the FIIs everybody is more looking forward to to to park their money on the safe assets of the particularly the safe haven assets. So means in March itself this year the FI outflow has been around 11 billion dollars against the full calendar year 25 where we saw around 19 billion dollars. So I I would say that it is more of a fear factor. In spite of fundamentals as I said remain strong it's more to do with the fear factor which we have currently in the geopolitics and therefore it is making people jittery to continue to have the positions even for a country like India where the fundamentals are pretty strong as of now.

[00:07:07]Okay. Thank you so much for that Naveen.

[00:07:10]That's of course the take on the rupee pressure continues.

[00:07:13]But you know the the other