The escalation of US reciprocal tariffs on Indian exports, which increased duties up to 50% in certain sectors, further dampened investor sentiment and disrupted global trade, contributing to the rupee's weakness.

Despite the RBI's multiple interventions, including selling dollars and using forex reserves to defend the rupee, it remained among the worst-performing Asian currencies, with the exchange rate struggling to stay above 89 per dollar.

The Indian rupee faced significant pressure throughout the year, hitting multiple record lows due to concerns over a widening current account deficit and declining foreign investment inflows.

During the Hindu calendar year Samvat 2081, the rupee depreciated by 4.36% against the US dollar, a decline driven by global trade tensions and foreign outflows.

The fall in yields was also fueled by expectations of continued policy easing amid moderating inflation and liquidity measures such as Rs 2.4 trillion in open market operations, which helped lower yields across maturities.

Meanwhile, bond markets experienced a positive turn as yields fell from around 6.58% to 6.38%, with some reaching as low as 6.24%, driven by policy easing and strong domestic demand.

This decline in bond yields was supported by a 100 basis points rate cut by the RBI, which led to a 33 basis point fall in the 10-year government bond yield, reflecting an accommodative monetary stance.