Why is the rupee weakening despite broad dollar weakness?

The rupee is weakening due to a combination of rising oil prices—Brent crude climbing past $91/barrel amid escalating U.S.-Iran tensions—and surging U.S. Treasury yields, particularly the 30-year yield hitting a two-decade high; this pressure intensified after the Reserve Bank of India unexpectedly shortened the foreign-currency deposit swap window deadline to August 31, a move that surprised bankers and triggered a decline past 95.50 even as the dollar weakened broadly.

What specific RBI policy change contributed to recent rupee depreciation?

The Reserve Bank of India’s decision to bring forward the deadline for its foreign-currency deposit swap facility for non-resident Indian (NRI) deposits by one month—to August 31—was an unexpected move that took most bankers by surprise and directly contributed to the rupee’s weakening past the 95.50 level on Monday, despite central bank intervention and broad dollar weakness.

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