Indian Rupee Update

Advisory Bazaar Info Services

Falling Crude Oil Prices May Provide Additional Support to the Indian Rupee

The Indian rupee is expected to maintain its strengthening trend, supported by lower crude oil prices and the Reserve Bank of India’s (RBI) continued intervention in the foreign exchange market.

According to market experts, the rupee is likely to trade in the 95.25–95.50 per US dollar range, after closing at 95.38 per dollar in the previous trading session.

The rupee appreciated by around 1.2% last week, primarily due to the RBI’s regular dollar-selling interventions, which helped stabilize the domestic currency.

Market sentiment has also improved significantly. Earlier, concerns had emerged that the rupee could weaken to 97 per US dollar, but expectations have now shifted toward a relatively stable trading range.

Meanwhile, Brent crude oil prices fell 4.7%, slipping below $84 per barrel, after US President Donald Trump announced that the United States would prioritize nuclear negotiations with Iran instead of pursuing immediate military action.

Analysts believe that softer crude oil prices will reduce India’s import bill, giving the RBI greater flexibility to support the rupee and increasing the likelihood of continued currency stability.

In recent months, the RBI’s policy measures have contributed to nearly $41 billion in capital inflows, strengthening both India’s foreign exchange reserves and the central bank’s ability to support the rupee.

Of this total, $36.7 billion came through Foreign Currency Non-Resident (FCNR) deposits.

Meanwhile, the RBI’s net forward foreign exchange book declined marginally to $103.3 billion in June, mainly due to a reduction in short-term US dollar liabilities.