Rupee Closes Nearly Flat, Modest Depreciation Bias Lingers

Why It Matters

The rupee’s near‑flat stance underscores ongoing volatility, signaling that RBI support may be needed to stabilize India’s external balances. Persistent depreciation pressure could affect foreign investment flows and debt‑servicing costs.

Key Takeaways

• Rupee closed at 90.6350 per dollar, near flat.
• Weak local stocks and high dollar demand pressured rupee.
• RBI likely intervened to contain further depreciation.
• Nifty 50 fell over 1% amid AI, tech concerns.
• Investors await U.S. inflation data for Fed outlook.

Pulse Analysis

The Indian rupee’s modest drift this week reflects a broader tug‑of‑war between market fundamentals and policy intervention. While the currency barely moved from its previous close, underlying pressures—such as a softening equity market, heightened interbank dollar demand, and the expiry of non‑deliverable forward positions—have kept the RBI on standby. Historically, the central bank has used spot market purchases to temper sharp declines, and traders now see a pattern of “steady drift with occasional caps,” a dynamic that adds a layer of uncertainty for corporates reliant on foreign exchange stability.

Equity markets mirrored the currency’s tension, with the Nifty 50 sliding over 1% as investors adopted a risk‑off posture, wary of artificial‑intelligence hype and narrowing tech margins. This sentiment contrasted with stronger performances in North Asian indices, where earnings growth and dividend yields appear more attractive. Simultaneously, Indian sovereign yields rose on concerns about fiscal deficits and subdued demand, tightening financing conditions for both the public and private sectors. The confluence of weaker stocks, rising bond yields, and a cautious foreign investor base amplifies the rupee’s vulnerability to external shocks.

Looking ahead, the rupee’s trajectory will hinge on global monetary cues, particularly U.S. inflation data slated for release later today. A softer U.S. price index could ease expectations of further Federal Reserve tightening, indirectly supporting emerging‑market currencies like the rupee. Conversely, persistent inflation may reinforce a hawkish stance, pressuring the rupee anew. Market participants will likely monitor RBI’s response closely, balancing the need for intervention against the risk of depleting foreign‑exchange reserves, while investors recalibrate exposure to Indian assets amid this delicate macro backdrop.

Rupee closes nearly flat, modest depreciation bias lingers

Reuters · Last Updated: Feb 13, 2026, 03:41:00 PM IST

The Indian rupee was little changed on Friday as pressure from weak local stocks and elevated interbank dollar demand met likely central‑bank intervention to defend the currency, traders said.

The Indian rupee was little changed on Friday as pressure from weak local stocks and elevated interbank dollar demand met likely central‑bank intervention to defend the currency, traders said. The rupee closed at 90.6350 per dollar, down marginally from its close at 90.59 in the previous session. The currency was little changed week‑on‑week.

Maturity of positions in the non‑deliverable forwards market added to the strain on the rupee on Friday, alongside a risk‑off mood in global equities weighed by lingering concerns over the impact of artificial intelligence and shrinking tech‑sector margins. MSCI’s broadest index of Asia‑Pacific shares fell more than 1 % with India’s benchmark equity index, the Nifty 50, also down by a similar amount.

Regional currencies were mostly weaker as well, keeping the rupee under pressure.

The rupee “is back to the familiar pattern of steadily drifting lower while interventions keep the moves contained,” a trader at a Mumbai‑based bank said.

The currency’s relief rally after the U.S.–India trade deal has partly faded as corporate dollar demand stayed firm and some foreign investors remained cautious on a rebound in returns from Indian equities and bonds.

Concerns over large government borrowings and weak demand pushed bond yields higher, while equities lagged regional peers in the absence of clear AI bets. “At this point, North Asian markets like China, Hong Kong, (South) Korea, and Taiwan look superior to India from earnings‑growth outlook, valuation, and dividend‑yield perspectives,” said Sat Duhra, portfolio manager at Henderson Far East Income.

In the near term, investors will turn their focus to U.S. inflation data due later in the day, which is expected to influence expectations for the Federal Reserve’s rate outlook.