1 hr ago
Rupee Gains 4 Paise as Oil Prices Limit Recovery
The Indian rupee became slightly stronger against the US dollar on Monday.
It rose by 4 paise to reach 94.39 rupees per dollar.
Money flowing into India through FCNR-related deposits helped support the currency.
However, rising oil prices made it harder for the rupee to gain more.
Brent crude oil reached about $97 per barrel.
Tensions between the United States and Iran raised concerns that oil shipments could be disrupted.
More expensive oil can make India spend more money on imports and demand more dollars.
Indian share markets also fell in early trading.
An analyst said the rupee could weaken toward 95, 95.50, or 96 if global pressures become stronger.
The rupee gained 4 paise to 94.39 against the US dollar in early Monday trade.
Strong FCNR-related dollar inflows supported the rupee, while elevated crude prices limited its gains.
Brent crude rose 0.80% to $97.05 per barrel amid US-Iran tensions and Strait of Hormuz supply concerns.
The dollar index edged up 0.01% to 99.18, while the Sensex and Nifty both declined in early trading.
India’s foreign exchange reserves rose $11.475 billion to a record $740.803 billion for the week ended August 28.
- Who
- The Indian rupee, the US dollar, currency traders, and market participants; CR Forex Advisors Managing Director Amit Pabari provided the outlook.
- What
- The rupee gained 4 paise to 94.39 against the US dollar in early trade.
- Where
- The interbank foreign exchange market in Mumbai, India.
- When
- Early trading on Monday; the previous close was recorded on Friday.
- Why
- Strong FCNR-related dollar inflows supported the rupee, while elevated crude prices and global tensions limited its gains.
Forces Supporting the Rupee
Forces Pressuring the Rupee
Currency movement
Forces Supporting the Rupee
Strong FCNR-related dollar inflows and robust liquidity helped the rupee strengthen.
Forces Pressuring the Rupee
Elevated oil prices could increase India’s import bill and demand for dollars, putting pressure on the rupee.
Near-term outlook
Forces Supporting the Rupee
The rupee has support around 94.00–94.20, according to Amit Pabari.
Forces Pressuring the Rupee
If global headwinds intensify, USD-INR could move toward 95.00, 95.50, and eventually 96.00.
Global conditions
Forces Supporting the Rupee
India’s foreign exchange reserves reached a record $740.803 billion, providing a positive domestic financial indicator.
Forces Pressuring the Rupee
US-Iran tensions and concerns about disruptions through the Strait of Hormuz boosted safe-haven demand and raised oil prices.
Key facts
- Rupee rate
- 94.39 per US dollar in early Monday trade
- Opening rate
- 94.40 per US dollar
- Brent crude
- $97.05 per barrel, up 0.80%
- Dollar index
- 99.18, up 0.01%
- Foreign exchange reserves
- $740.803 billion after rising $11.475 billion
- Sensex
- 76,342.66, down 172.77 points
- Nifty
- 23,832.60, down 63.30 points
- Foreign institutional investors
- Net equity sales of Rs 3,111.94 crore on Friday
Quotes
Amit Pabari
Managing director of CR Forex Advisors
“The rupee entered the week on a stronger footing, supported by heavy FCNR-related dollar inflows. However, the global backdrop remains a challenge. 94.00–94.20 remains the key support zone. If global headwinds intensify, USDINR could move back towards 95.00, 95.50 and eventually 96.00.”
deccanchronicle.com
Sources
Related news
Rupee Extends Sixth-Day Gains Amid Inflow and Oil Risks
Rupee Gains as Softer Dollar Counters Oil and Geopolitical Risks
Rupee Recovers as Easing Brent Prices Offset Dollar Pressure
Rupee Holds Near 95.64 Amid Iran Sanctions, Oil Risks
Rupee Opens Lower as Fed, Oil Risks Weigh
Rupee opens 4 paise higher at 95.40 against US dollar
Sensex, Nifty Open Lower Amid IPO Rush, Middle East Tensions
Iran Plans Hormuz Shipping Corridor and Maritime Exclusion Zone
Iran Ties Hormuz Passage to End of US Threats
Indian Fuel Rates Mostly Steady Despite Crude Oil Rise
