Indian Rupee Falls Sharply After Trump's Comments on Iran Ceasefire Agreement

The Indian rupee posted its biggest single-day fall in a month on Wednesday after comments by US President Donald Trump fuelled concerns over the ceasefire, pushing crude oil prices higher. The domestic currency went to a low of 95.60 against the dollar before settling at 95.55, down 59 paise from the previous close, according to Bloomberg. US President Donald Trump said the interim ceasefire agreement with Iran was “over,” calling it a waste of time. There were also fresh strikes between the two countries earlier in the day. Following this, oil prices rose 6% to $78.62 per barrel on Wednesday. “Trump has previously taken firm positions on policy issues before subsequently easing them. Consequently, markets may initially respond negatively to such announcements, but any prolonged impact will likely depend on whether the measures are ultimately implemented,” said Ritesh Bhansali, deputy CEO, Mecklai Financial Services. Most Asian currencies weakened on Wednesday. The rupee was the worst-performing Asian currency after reacting to Trump’s remarks, followed by the Thai baht, which fell 0.51%, and the Japanese yen, which declined 0.2%. In 2026 so far, the rupee has declined 6.3%. Over the past year, it depreciated 10.2%. Currency dealers said that the Reserve Bank of India likely intervened through its dollar sales in both spot and forward markets, which capped further losses. Bhansali said the rupee is unlikely to witness a significant depreciation again. In the near-term, he expects the currency to trade in the range of 94.5-96. Anindya Banerjee, head of currency and commodity research, Kotak Securities, said that the rupee is benefiting from bond inflows at present, but more substantial support is expected once FCNR(B) inflows increase. “Once that picks up, we will see a larger impact on the rupee.” Meanwhile, bond yields also came under pressure from higher oil prices. The yield on the 10-year benchmark bond rose 7 basis points to 6.76% on Wednesday, the biggest single day rise in four months.