•India’s government bond yields climbed sharply in March, with the benchmark yield rising by 37 bps to end at 7.03%. This move was driven by escalating geopolitical tensions from the US–Iran conflict, which heightened concerns around inflation. •The INR weakened to a record low of 95.22/$ by end-March 2026, driven by sustained outflows from domestic equities. In response to the sharp depreciation amid heightened volatility following the US–Iran conflict the RBI introduced measures to curb excessive risk-taking, limit speculative pressures, and ensure orderly functioning of the FX market, including capping banks’ Net Open Positions (NOP), restricting Authorised Dealers from offering INR NDF contracts to both residents and non-residents, along with tightening norms around cancellation and rebooking of FX derivative contracts
