Rupee crashes past 95/$, logs worst annual fall in 14 years
GS3Economy · S&T · Environment · Security· Monetary policy, RBI & banking· Prelims·
Why in news
The Indian rupee hit a 14-year annual low, crashing past 95/$, prompting intervention by the Reserve Bank of India (RBI) to stabilize the currency.
Background
The rupee experienced its worst annual fall in 14 years, reaching record lows before a slight rebound. The RBI intervened in the final minutes of trading to stabilize the currency against the US dollar.
Facts for Prelims
- FactRupee depreciation: Hit a record low past 95/$ in March 2026.
- BodyRBI: Intervened in the forex market to stabilize the rupee.
- FactMarket expectation: Rupee expected to remain between 94/$ and 95/$ on April 2nd.
- FactDepreciation drivers: High demand from oil companies, importers, and hedge funds.
For Mains
Q. Analyze the factors contributing to the volatility of the Indian Rupee and evaluate the effectiveness of RBI's interventionist measures in maintaining exchange rate stability.
Dimensions to cover in your answer
- External demand pressure: High import requirements from oil companies and hedge fund activities driving currency depreciation.
- Monetary policy friction: Conflict between central bank directives to curb open positions and market-driven demand for forex.
- Interventionist limits: Balancing currency stability against the depletion of foreign exchange reserves during periods of high volatility.
Keywords: Exchange rate volatility · Monetary intervention · Forex reserves · Currency depreciation · Market liquidity
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This note is generated automatically from SatyaDheesh's news feed and mapped to the UPSC CSE syllabus. Check facts against the original report or PIB before using them in an answer.