₹ logs worst day in over 2 yrs, erases 2025 gains

The rupee on Thursday erased all the gains it made in 2025 after logging its steepest single-day decline in more than two years, as investors safe-haven assets amid escalating tensions between India and Pakistan.

- ANJALI KUMARI & ABHISHEK KUMAR

According to dealers, panic dollar buying began after India confirmed it neutralised Pakistan's attempts to target multiple military sites in its northern and western regions between Wednesday Thursday.

The local currency depreciated to 85.79 per dollar, or 1.04 per cent, in its sharpest decline since February 2023.

The 10-year government bond yield rose 6 basis points (bps) to 6.40 per cent, while the Sensex declined 412 points, or 0.51 per cent, to close at 80,335, with 23 of its constituents ending in the red. The fear gauge, India VIX, spiked 10 per cent to 21.01, the highest level since April 9. GIFT Nifty was down 304.5 per cent, or 1.26 per cent, at 11 pm.

"This (rupee's weakening) was triggered primarily by rising geopolitical tensions following India's military action against targets in Pakistan and Pakistan-occupied Jammu & Kashmir," said Abhishek Goenka, chief executive officer, IFA Global.