The rupee strengthened for the fourth consecutive session on Thursday, while government bond yields declined further as a sharp fall in crude oil prices and sustained foreign inflows boosted sentiment across domestic markets.
The rupee settled at 94.40 per dollar against the previous close of 94.66 per dollar. The local currency touched an intraday high of around 94.14 per dollar before giving up some gains by the end of trade due to month-end dollar demand from importers, dealers said.
Market participants said lower oil prices and foreign portfolio inflows supported the domestic currency, even as most Asian peers weakened against the dollar.
“The crude has fallen to pre-war levels, which has improved market sentiment, and we are also seeing inflows on the debt side,” said a dealer at a state-owned bank.
Brent crude oil prices fell below levels prevailing before the Iran conflict, slipping to around $72 per barrel from the previous day’s $75.52 per barrel as concerns over supply disruptions eased and tanker movement through the Strait of Hormuz normalised.
The yield on the benchmark 10-year government bond settled at 6.77 per cent, down 3 basis points from the previous close of 6.80 per cent, extending its decline for a fourth straight session. Since the Reserve Bank of India’s June monetary policy meeting, the yield has fallen by about 23 basis points, while it has declined by 27 basis points in the current quarter so far.
Foreign investor interest in domestic debt has remained strong during the current month. Net foreign portfolio investment (FPI) in debt stood at ₹8,109 crore on June 24, the highest single-day inflow so far in 2026 and the second-largest since 2024, according to National Securities Depository Ltd (NSDL) data.
“The auction went in four bids because some banks bid aggressively, so the market turned and went to 6.75 per cent (yield on the benchmark 10-year government bond). After the fall in yields, there was some profit-booking due to the long weekend,” said a dealer at a primary dealership.
The government sold ₹28,000 crore worth of government securities at the weekly auction. The cut-off yield on the 15-year bond was set at 7.05 per cent, while that on the 50-year bond was set at 7.53 per cent.
The rupee has appreciated by 0.64 per cent so far in June, trimming its decline for the current calendar year to 4.79 per cent.
Market participants now eye US inflation data and further developments in global crude oil markets for cues on the direction of the rupee and domestic bond yields.
