Currency experts noted that on the afternoon of May 8, when tensions between India and Pakistan increased, the Indian rupee sank past the 85-mark. At the close of business, the local currency was trading at 85.3850 against the US dollar, down from 84.6387 at the open and 84.8325 at the close of business.
Following rumors that the Defence Minister stated that Operation Sindoor is still ongoing and that India will retaliate if Pakistan worsens the situation, the market also saw a sell-off.
In addition, there was pressure on the currency market as a result of massive withdrawals from Indian stocks. Following a range-bound session, investors hurried to sell their equity holdings as global tensions increased and anxiety increased due to the weekly expiry session, causing the Nifty 50 and Sensex to see further declines approaching the closing bell.
Currency experts indicated that the Reserve Bank of India (RBI) intervened in the market around 85.49, causing the foreign exchange rates to drop by 10 paise. The rupee started the day on a strong note, rising 20 paise, despite the fact that tensions were still rising along the border.
