Indian Rupee Climbs to One-Month High of 95.13 Against US Dollar Amid Oil Price Decline and Stronger Foreign Inflows

The Indian rupee strengthened to a one-month peak of 95.13 against the US dollar, driven by a notable decline in global oil prices and renewed foreign capital inflows into Indian markets.

Oil prices fell sharply after the US President signaled an effort to negotiate a deal with Iran, a development that eased concerns over global energy supplies. For India, which imports over 80% of its crude oil requirements, lower oil prices typically reduce pressure on the current account deficit and provide support for the domestic currency.

Foreign investors returned to Indian equities, contributing to the rupee's upward movement. The renewed inflow of overseas capital into Indian stocks marked a shift in investor sentiment toward emerging market assets, after a period of outflows that had weighed on the currency.

Meanwhile, bond yields in India recorded a slight increase, reflecting shifting expectations in the fixed-income market.

The Reserve Bank of India (RBI) is widely expected to maintain its current interest rate levels at its policy meeting this week. Analysts anticipate that the central bank will adopt a cautious tone in its policy statement, particularly with regard to inflation dynamics. India's central bank has been balancing the need to support economic growth with its mandate to keep inflation within a 2–6% target band, with a medium-term goal of 4%.

The combination of softer crude oil prices, stronger portfolio inflows, and a steady monetary policy outlook has created favorable conditions for the rupee in recent sessions.

Source: Economic Times Markets