It’s Monday morning, February 2, 2026, and if you’ve been watching the currency tickers, you saw the Rupee almost kiss the psychological 92-per-dollar grave before making a sudden U-turn. After a volatile Sunday Budget session, the domestic unit opened on a shaky note but managed to claw back 40 paise by mid-morning.
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The thing is, the market was bracing for a total meltdown because of the government’s massive ₹17.2 lakh crore borrowing plan. But then the RBI stepped in. Or nothing.
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The Rupee’s Budget Hangover: Field Notes
It’s an ongoing situation where the Rupee is caught between “Policy Credibility” and “Supply Shock.” Here’s the ground reality:
The 92-Barrier: On Friday, the Rupee hit a record low of 92.02. This morning, it looked ready to dive again, but the RBI likely intervened before the opening bell, shoring it up to 91.55. Let’s be real—the central bank is the only thing keeping the “92” headline from becoming permanent. Those too.
The Borrowing Blow: The Budget announced gross borrowing of ₹17.2 lakh crore for FY27—about 17% higher than this year. The market wasn’t expecting that high of a number. And then bond yields spiked to their highest in a year followed.
The “Silver Lining”: While the borrowing is high, the fiscal deficit target of 4.3% and a shrinking debt-to-GDP ratio (55.6%) actually gave some global investors hope. It shows the government is still trying to be the “adult in the room” with its wallet.
Undervalued? Some analysts argue the Rupee is actually undervalued on a REER (Real Effective Exchange Rate) basis. The thing is, if the dollar index cools down globally, we might see the Rupee drift back toward the 91.00–91.20 zone. Or nothing.
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Key Forex & Bond Metrics: Feb 2, 2026
| Metric | Current Value | Change from Friday | Market Sentiment |
| USD / INR | 91.55 | +0.4% (Appreciation) | Cautious / Intervention-led |
| 10-Yr Bond Yield | 6.76% | +7 bps | Bearish (Higher Borrowing) |
| Fiscal Deficit (FY27) | 4.3% | -0.1% (Estimated) | Positive (Consolidation) |
| Gross Borrowing | ₹17.2 L Cr | +₹2.6 L Cr | Negative (Supply Overhang) |
And Here’s the Kicker…
The Securities Transaction Tax (STT) on futures and options was hiked in this Budget. The thing is, this move is actually pushing some speculative capital out of the stock market and into “safer” bonds or cash, which ironically puts more pressure on the Rupee. Those too.
One side comment—if you’re planning an overseas trip, that TCS cut to 2% is great, but it’s being eaten alive by the Rupee’s 5.3% slide over the last 12 months. It’s a bit messy. Authentic, but a headache for travelers. It’s an ongoing situation. Or nothing.
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End…
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