The Indian rupee closed at 95.29 on Tuesday, May 5 — within the 95.32 record range that the paper marked on May 4. The currency has weakened 5.5% year-to-date. April's foreign portfolio outflow hit ₹60,847 crore ($6.5 billion). Year-to-date FPI outflows now total ₹1.92 trillion — exceeding the entire 2025 calendar-year outflow of ₹1.66 trillion. [1] May's flows are the first read on whether Brent's pause-day crash below $100 is enough to retrace any of the April damage.

The mechanism is straightforward. Higher Brent inflates India's import bill — the country imports more than 80% of its crude. The widening current-account deficit pressures the rupee. Foreign investors, watching the macro deteriorate, pull capital. RBI intervenes in the spot and forward markets but cannot override the structural flow. The Reserve Bank has $698 billion in reserves — adequate, but down from a $728.5 billion peak. Governor Sanjay Malhotra has called the level "adequate" while the central bank quietly explores a 2013-style NRI deposit scheme and elimination of the 5% withholding tax on overseas government bond investors. [2]

What May tests is whether Brent below $100 stops the outflow. The Pakistan IMF tranche of $1.21 billion arrives Friday May 8 — alongside India's own external balance, that is the regional read. If FII outflows reverse meaningfully in May, the rupee can retrace toward 93. If outflows continue at April pace, 96.80 — Barclays's year-end forecast — gets hit sooner.

The RBI's tools are spent. The April 1 NDF curbs were partially rolled back April 20. The rupee depreciated through the rollback. The remaining lever is fiscal — and that is the finance ministry's call.

-- PRIYA SHARMA, Delhi