The Indian Rupee weakened during Wednesday’s European session 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%. Concerns regarding escalating global trade tensions and a potential U.S. recession are contributing to INR depreciation. The FOMC Minutes release is anticipated later in the day. The RBI’s rate cut, the second consecutive reduction, and a shift to an “accommodative” monetary policy stance aim to stimulate the slowing Indian economy, which is facing headwinds from potential U.S. tariffs. Ongoing foreign capital outflows and USD demand from importers, foreign investors, and oil companies are exerting downward pressure on the INR. However, declining crude oil prices may mitigate losses, given India’s position as the world’s third-largest oil consumer. Market participants will be closely monitoring the FOMC Minutes and a scheduled speech by Federal Reserve’s Thomas Barkin.
