India's central bank introduces measures to support the rupee, which surges 1%.

The Indian rupee surged the most in six months after the central bank rolled out its most aggressive defense since the 2013 taper tantrum. The currency strengthened 1% on Monday, its biggest gain since April, with the dollar-rupee pair quoted at 95.7575. One-month non-deliverable forwards had earlier fallen as much as 0.8%. Bonds declined, with the benchmark 10-year yield rising 5 basis points to 7.35%, the highest since November 2023. The Reserve Bank of India on Saturday unveiled measures to support the currency after it neared a record low of 97 per dollar. The steps include a dedicated window to meet the dollar needs of state-owned oil companies and reserve requirements on some foreign-exchange derivatives. The central bank had already raised interest rates on Wednesday and signaled it could tighten further. "These are tactical band-aids, not structural solutions," said Madhavi Arora, chief economist at Emkay Global Financial Services. "On the face of it, the measures can limit speculative positions, raise hedging costs and tighten banking liquidity, offering some near-term support to the rupee."