Rupee climbs to near one-month peak on lower crude oil prices
Mumbai, Aug 3
The Indian rupee surged to a near one-month high on Monday as crude oil prices fell by up to 7 per cent to below the $80-a-barrel mark amid hopes of a deal to end the Iran conflict, while strong foreign inflows further supported the currency.
The domestic currency strengthened nearly 0.3 per cent to 95.13 against the US dollar, its highest level since July. It had settled at 95.38 against the US dollar in the previous session and had gained more than 1 per cent last week.
According to market experts, the rupee strengthened to around 95.1 per dollar as lower crude prices improved India's inflation and import outlook.
They noted that the RBI's near-daily dollar sales helped ease concerns of the currency weakening beyond the 97-per-dollar level.
The rupee's gains came as oil prices declined sharply after US President Donald Trump refrained from launching a fresh attack on Iran and instead sought a quick deal aimed at halting Tehran's nuclear ambitions and reopening the Strait of Hormuz.
Brent crude -- the international oil benchmark -- fell around 5 per cent to $83.5 per barrel.
Similarly, US West Texas Intermediate (WTI) crude declined about 7 per cent to remain below $79 per barrel.
In addition, foreign investors were net buyers of Indian equities in July which is their first monthly net purchase since February.
Separately, data released over the weekend showed that measures announced by Indian authorities last month have attracted total inflows of $41 billion, driven largely by non-resident deposits.
Additionally, domestic equity markets also traded higher on Monday, with benchmarks jumping up to 1 per cent in the morning trade amid buying in FMCG, banking, metal and cement shares.
— IANS
Reader Comments
This is good news but let's not get too excited. The rupee strengthening to 95 is nice, but we were at 73-74 just a couple of years ago. The dollar-rupee situation is still fragile. However, the $41 billion inflow from NRI deposits shows confidence in India's economy. Hope this trend continues 🤞
Lower crude prices are a double blessing for India - we import 85% of our oil needs! This will definitely help control our current account deficit. But I must say, the RBI's intervention has been smart. They've been quietly managing volatility without making headlines. Thumbs up for the central bank's strategy 👍
As a small business owner dealing with imports, this is a welcome development! Every rupee gain means lower costs for us. The FII inflows returning after months is also a positive sign. But honestly, we need more structural reforms to make the rupee stable long-term, not just temporary relief from oil price drops.
Good news for the economy, but the common man benefits only if the government passes on the benefit of lower international oil prices by cutting excise duty and state VAT. Otherwise, we'll keep paying the same prices at the pump as before. The GST on petrol and diesel is still ridiculously high - that's what needs attention now. India's import bill reduction is great for macro numbers though.
As someone working in the IT sector whose salary is in dollars, a stronger rupee isn't great for me personally! 😅 But honestly, this is better for the overall economy - lower input costs for companies, better inflation outlook, and more FII money coming in. And those
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