Indian Rupee: $136 Billion Inflows Push Rupee to Two-Month High

* The Indian rupee strengthened to a two-month high of ₹94.30 per dollar, gaining more than 1% this week.

* The rally has been supported by an unexpected $136.4 billion in foreign-currency inflows following special measures announced in June.

* The Reserve Bank of India (RBI)’s foreign-exchange reserves have reached a record $729.3 billion, strengthening its ability to support currency stability and manage external shocks.

* Higher reserves provide the RBI with greater flexibility to intervene against sharp currency movements, particularly as crude oil prices rise amid escalating U.S.-Iran tensions.

* Crude oil prices have risen around 7% this week, raising concerns over India’s trade deficit and inflation, given the country’s high dependence on oil imports.

* Stronger foreign-exchange reserves give the RBI a larger cushion to manage the impact of elevated oil prices and external-sector pressures.

* Nomura expects India’s Balance of Payments (BoP) to remain in a surplus of around $66 billion in the current financial year, compared with a deficit in the previous year.

Outlook: Strong foreign-currency inflows and record reserves are supporting the rupee, while higher crude prices and geopolitical tensions remain key near-term risks.