Rupee Rises To Near One-Month High As Crude Prices Fall

The Indian rupee strengthened to a near one-month high against the US dollar on Monday, supported by a sharp decline in global crude oil prices and sustained foreign capital inflows.

The domestic currency gained nearly 0.3 per cent to 95.13 against the dollar, its strongest level since July, after closing at 95.38 in the previous session.

The rupee had already risen more than 1 per cent last week.

Market experts attributed the rally to lower crude oil prices, which improved India’s inflation and import outlook. They also credited the Reserve Bank of India’s near-daily dollar sales with helping prevent the rupee from weakening beyond the 97-per-dollar mark.

Oil prices fell sharply after US President Donald Trump chose not to launch fresh military action against Iran and instead backed negotiations aimed at curbing Tehran’s nuclear ambitions and reopening the Strait of Hormuz.

Brent crude declined about 5 per cent to $83.5 a barrel, while US West Texas Intermediate (WTI) crude dropped nearly 7 per cent to below $79, easing pressure on India’s import bill and supporting the domestic currency.

Strong foreign inflows further lifted sentiment.

Measures introduced by Indian authorities last month attracted $41 billion in inflows, largely through non-resident deposits, while foreign institutional investors turned net buyers of Indian equities in July for the first time since February.

Analysts said the inflows strengthened the rupee, while gains of up to 1 per cent in the Sensex and Nifty reflected improved investor confidence, supported by lower oil prices and resilient economic fundamentals.

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