USD/INR STRENGTHENS AMID ESCALATING INDIA-PAKISTAN TENSIONS
USD/INR STRENGTHENS AMID ESCALATING INDIA-PAKISTAN TENSIONS
The Indian Rupee (INR) experienced significant volatility on Wednesday, pressured by escalating geopolitical tensions between India and Pakistan.
The INR weakened as concerns grew over potential military escalation and its impact on the economy.
On April 29, 2025, the Indian rupee saw significant fluctuations due to rising concerns about a potential escalation in tensions between India and Pakistan.
The rupee initially strengthened, reaching 84.95 against the U.S. dollar—its highest level of the year—before quickly dropping to 85.40 due to stop losses and market sensitivity to news headlines.
It later stabilized at 85.21, down 0.2% for the day.
The volatility was further exacerbated by unverified reports of military activity along the India-Pakistan border.
Pakistan's defense minister suggested an imminent Indian military incursion, which followed a recent militant attack on tourists in Kashmir.
Currency traders described the market as "highly sensitive" to developments between the two neighbors, emphasizing cautious trading strategies.
In response to the escalating violence, authorities have closed 48 of the 87 government-authorized tourist resorts in Indian-controlled Kashmir.
This measure follows a deadly attack near the resort town of Pahalgam that killed 26 people, mostly Indian tourists.
The closure of these sites has significantly impacted the region's tourism industry, leading to widespread cancellations and economic strain.
