The rupee, which had weakened past the 95.80 mark earlier in the session and touched a record low of 95.85 against the US dollar, recovered sharply to trade around 95.66 later in the day.
The rebound also lifted sentiment in banking and NBFC stocks, which pared losses and turned higher in trade.
Market participants attributed the recovery partly to a Bloomberg report stating that India is considering a significant reduction in taxes paid by foreign investors on Indian bonds as authorities seek to align policies with global standards and boost inflows.
According to the report, the Reserve Bank of India
has recommended the move, which is considered by the Finance Ministry. Discussions around easing the tax burden have reportedly gained momentum as policymakers attempt to contain the rupee’s depreciation.
The rupee had come under sustained pressure in recent sessions due to elevated crude oil prices and persistent foreign portfolio outflows. The currency has fallen to record lows this week amid concerns that prolonged tensions linked to the Iran conflict could keep oil prices elevated and widen India’s current account deficit.
India imports nearly 90% of its crude oil requirements, making the rupee particularly vulnerable to spikes in global energy prices.
Earlier in the session, Brent crude hovered near $106 a barrel as investors tracked developments around the Iran conflict.
Analysts at ING had said any easing in geopolitical tensions or crude oil prices could provide relief to the rupee, which has remained under pressure from rising import costs and external account concerns.
Brokerage Nomura had also said policymakers may consider additional measures in the coming months to support the external sector and curb pressure on the currency.
–With agencies inputs
First Published: May 14, 2026 12:48 PM IST
