FX.co ★ Rupee Slips on Election Caution

The Indian rupee declined to approximately 90.2 per dollar, retracting some of the gains made in the preceding session as investor focus shifted towards the civic elections in Maharashtra. These elections mark the end of a four-year postponement, with 1,700 candidates vying for 227 seats in the Brihanmumbai Municipal Corporation, which manages an annual budget exceeding INR 74,400 crore. Conducted after a nine-year hiatus, the elections are under stringent security measures, with vote counting set for January 16. The political weight of the Mumbai elections has influenced market sentiment as investors assess potential repercussions for state and local governance. Mitigating the rupee's decline, India’s wholesale price index saw a 0.83% increase year-on-year in December 2025, recovering from a 0.32% decrease in November. This development has led investors to reassess their expectations of aggressive monetary easing by the central bank.