FX – WEEKLY UPDATE :

Weekly SYNOPSIS: 22/05/2026

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Currency Map:

Currency Pairs	WEEK  CLOSE	PRIOR WEEK CLOSE	% change
USD/INR	95.68	95.92	-0.25
EUR/INR	111.39	111.63	-0.21
GBP/INR	128.79	128.10	0.53
JPY/INR	60.31	60.54	-0.37

Brent Crude closed at USD 103.50 VS previous week close of USD 109. Gold closed at USD 4510. Nifty closed at 23719 vs prior week close of 23643. 10 Year G-SEC Yield is now at 7.09%.

Major developments: USDINR traded in the 95.61-96.96 range last week, and Rupee gained 0.25% w/w against USD. EUR declined 0.21% w/w and GBP climbed 0.53% w/w against Rupee. USDINR fwd premia closed at 3.35% for 1 year.

Indian benchmark Equity indices declined 0.32% w/w. 10 Year G-SEC Yield closed at 7.09%.

FX reserves stood at USD 688.8 bn, as on May 15 th. Reserves declined USD 8.1 bn w/w.

In May, FII’S have sold Rs 22350 Cr of Indian Equities and have sold Rs 474 cr of debt.

Rupee gained to 95.67 on RBI intervention. RBI sold USD closer to 97 levels. Rupee’s fortunes hinge on Oil price and passage. Retail Oil prices were increased for the third time in 10 days, indicating that future weekly increases will be inevitable. Indian Equities continue to remain under pressure and 10 Year yields have climbed, in tandem with Global yields. Q4 FY 26 GDP is to be released in coming week. Nifty 50 companies have reported only 3.5% y/y increase in Net profit. However, other Large and Mid caps have reported robust increase in Net profit (29% y/y).

HSBC PMI composite index rose to 58.3 in April. Mfrg PMI climbed to 54.7. PMI(services) rose to 58.8.

Technically, USDINR has supports at 95.45 levels. The path of least resistance is Rupee fall to 97.50.

Hedging advise: Hedging be done according to policy objectives.

Global developments: US-Iran conflict is neither moving towards escalation or resolution. Asset markets are frozen in directionless trading. US continues applying heavy economic pressure by disrupting Iranian oil exports and maritime trade, while Iran is leveraging its grip over the Strait of Hormuz as its ultimate bargaining tool. It has become a war of attrition and a test of endurance for both sides. In the present situation, markets may remain trapped in Geo political upmanship.

US 10-year Treasury yield pushed toward 4.7%, the highest since January 2025, while oil prices flirted around USD 110. Fed’s April minutes sounded hawkish. Liquidation of US Treasuries by Foreign countries has resulted in sharp yield rise. US 10 year Treasury is close to 4.62%. Foreign Countries have to defend their currencies and are trying to balance by reducing US Treasury holdings.  China cut its holdings to USD 652.3B, the lowest level since September 2008, while Japan — the largest foreign holder of US debt — reduced holdings by roughly USD 47B to USD 1.191T. Overall foreign holdings declined from USD 9.49T in February to USD 9.25T in March. US Yields rapid rise is  increasingly reflecting global liquidity stress and balance sheet pressures across the international financial system.

International Energy Agency Executive Director warned on Thursday that global oil markets could soon enter a “red zone” during July or August if the Strait of Hormuz is not fully reopened before summer demand accelerates.

Currency technical levels: USDINR: 95.45(support) , (Resistance) 97/97.25

EURINR:109.50(Support),  (Resistance): 112.75

GBPINR: Supports: 126.50(supports), Resistance:130.50

JPYINR: Resistance:61.30/62.25 Supports: 59.25 (support).