RBI Steps In as Rupee Hits Fresh Low Amid Iran War

Good morning...

I’m Ashutosh Joshi in Mumbai with a quick pulse check as markets kick off a new week.

Asian stocks are witnessing another selloff early on Monday and crude oil has climbed as Iran-backed Houthi forces entered the Middle East conflict and more US troops arrived in the region — raising worries of a prolonged war. That suggests there will be little respite for the Nifty 50, which on Friday extended its slide to a fifth straight week — the longest losing streak since August.

Even so, the rupee could see a sharp rebound after the Reserve Bank of India stepped in late Friday with a measure to curb speculation. The rule requires lenders acting as authorized dealers to ensure their open positions in the onshore currency market do not exceed $100 million at the end of each trading day. It came following the rupee’s slide past the closely watched 94-per-dollar mark to yet another record low. Local lenders, though, have urged the RBI to rethink the rule, saying the measure would saddle them with large losses.

Monday is the last trading day of this fiscal year in India as March 31 is a holiday.

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