The Indian Rupee (INR) weakened during the early European session on Wednesday following the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) decision to reduce the Repo Rate by 25 basis points to 6.00%. This decision, made at the April meeting, marks the second consecutive rate cut and a shift in monetary policy stance from neutral to accommodative, aimed at stimulating the slowing Indian economy. The INR faces headwinds from escalating global trade tensions and concerns regarding a potential US recession. Persistent foreign capital outflows and USD demand from importers and investors further contribute to the currency’s depreciation. However, declining crude oil prices may mitigate some INR losses, given India’s position as the world’s third-largest oil consumer. Market participants will be closely monitoring the release of the Federal Open Market Committee (FOMC) Minutes and a scheduled speech by Federal Reserve (Fed) official Thomas Barkin later in the day.
