The Indian rupee saw a welcome uptick in early trade, climbing 22 paise to 85.72 against the US dollar. This rise comes on the back of falling global crude oil prices and a softer greenback, offering some relief to traders and investors alike. Foreign institutional inflows and a buoyant domestic equity market further fueled the rupee’s upward movement.
At the interbank foreign exchange, the rupee opened at 85.75 before inching higher to 85.72. This marks a recovery from Monday’s steep decline, where the local unit had dropped 54 paise to close at 85.94. The rebound hints at a potential stabilization after recent volatility.
Forex experts suggest the rupee’s recovery was partly due to dollar sales by the Reserve Bank of India (RBI) towards Monday’s closing. “Oil companies and importers continued to buy dollars, but there may have been some intervention from the RBI, pulling the rupee up,” said Anil Kumar Bhansali of Finrex Treasury Advisors LLP.
Bhansali also noted that Asian currencies showing a recovery on Tuesday morning set a positive tone for the rupee. He expects the currency to trade in a range of 85.40 to 86.00 in the near term. Market sentiment remains cautiously optimistic as external factors continue to play a significant role.
Global oil prices, a critical influencer of rupee movements, saw a dip. Brent crude futures fell 0.37% to $69.32 per barrel. “Brent’s drop to $69.28 reflects investor concerns over Trump’s new tariffs and oversupply fears from rising OPEC+ output,” Bhansali added. Lower oil prices are a positive for India, a net importer of crude, as they ease inflationary pressures and reduce the current account deficit.
The dollar index, which measures the US dollar against six major currencies, slipped 0.19% to 97.29. A weaker dollar typically benefits emerging market currencies like the rupee, making them more attractive to foreign investors.
Domestic equity markets also contributed to the rupee’s strength. The Sensex rose 85.39 points to 83,527.89, while the Nifty gained 16.50 points to 25,477.80. Foreign institutional investors (FIIs) added to the positive momentum, net buying equities worth Rs 321.16 crore on Monday.
While the rupee’s rise is encouraging, traders remain watchful of global developments. Oil price fluctuations, geopolitical tensions, and central bank actions will continue to dictate the currency’s trajectory. For now, the focus remains on whether the rupee can sustain its gains or face renewed pressure in the sessions ahead.