Rupee Market Update: February 16, 2026 The Indian Rupee recorded a marginal decline in early Monday trade, slipping by **1 paisa** to settle at **90.67** against the US Dollar. The local unit opened slightly higher at **90.63** before facing pressure from a combination of global and domestic factors. A primary driver of the weakness remains the consistent outflow of **Foreign Institutional Investors (FII)** from the equity markets. This trend is coupled with a resilient **US Dollar Index (DXY)**, which is currently holding in the **96.94** to **97.00** range. Global energy markets are also contributing to the cautious sentiment. **Brent crude** prices are trading near **$67.72** per barrel, marking a slight uptick from previous lows. While oil has steadied after recent weekly drops, the marginal rise adds to the demand for the dollar by domestic importers. External Buffers and Reserves India’s foreign exchange reserves saw a significant decline of **$6.71 billion**, bringing the total "forex kitty" to **$717.06 billion** as of the latest reporting week ending February 6. This drop was largely attributed to a sharp reduction in the value of **gold holdings**, which fell by **$14.21 billion** to **$123.48 billion**. Despite this dip, the Reserve Bank of India maintains that reserves remain adequate to cover over **11 months** of imports. Trade and Macro Sentiment The market is closely monitoring upcoming trade balance data. Recent figures for the second quarter of the 2025-26 fiscal year showed a trade deficit of **$31 billion** with Free Trade Agreement (FTA) partners. However, the outlook for Indo-US trade remains a point of interest, with projections suggesting the trade surplus with the US could cross **$90 billion** annually following recent tariff adjustments. Domestic equity indices, the **Sensex** and **Nifty**, have recently faced volatility, with the Sensex dropping over **1,000 points** in previous sessions. This broader market sell-off, particularly in the IT sector, continues to influence the rupee’s short-term trajectory.