The Indian rupee strengthened by 47 paise to 92.24 against the US dollar in latest trading, marking a significant turnaround from earlier weakness. As per Dynamite News, this represents a substantial recovery from the rupee's previous depreciation of 17 paise to 92.71 against the dollar. The currency's recent performance reflects easing geopolitical tensions between Iran and the US and RBI's stable policy stance, providing much-needed relief to investors and market participants.
The rupee's recovery was primarily driven by easing geopolitical tensions between Iran and the US, with reports of an Iran-US ceasefire agreement providing significant market relief. Additionally, RBI Governor Sanjay Malhotra stated that measures related to foreign exchange do not signal any permanent shift in policy, further reinforcing investor confidence. The central bank maintained its repo rate at 5.25% and kept its neutral stance, indicating no clear plans for rate changes in the near term. This policy stability has provided much-needed clarity to market participants amid global uncertainties.
The rupee's strengthening coincided with a strong rally in equity markets, with the BSE Sensex surging by approximately 2,946 points to close at 77,562 and the Nifty 50 climbing 873 points to reach 23,997. However, markets snapped their 5-day winning streak on Thursday, with the Sensex settling 931.25 points or 1.2 percent lower at 76,631.65 and the Nifty declining to 23,775.10, down 222.25 points or 0.93 percent. As per TradingView News, eleven of the 16 major sectoral indices were in the red, with financial stocks slipping about 1 percent after rising 5.5 percent in the previous session. The dollar index rose to 99.10, with the Euro and GBP both falling against the dollar, while Asian currencies also fell from their Wednesday highs.
Brent crude oil prices declined to approximately $94 per barrel as global tensions eased, providing significant relief to oil-importing nations like India. According to Dynamite News, cheaper oil contributes to the strengthening of the rupee, as lower crude prices reduce India's import bill and improve the country's balance of payments. The RBI projects the rupee to hover around 94 per US dollar in FY27, with crude oil prices expected to remain around $85 per barrel if the war halts for more days. However, prices could rise if the conflict continues and Iran maintains its blockade of the Strait of Hormuz.
According to Dilip Parmar, Senior Research Analyst at HDFC Securities, as reported by The Hindu BusinessLine, the Indian rupee's five-day rally came to a grinding halt, facing pressure from rising crude prices and relentless selling by foreign investors. Spot USD-INR is expected to trade within a range of 92.50 to 93.40, as traders balance global energy risks and domestic capital outflows. The RBI's stable policy stance and the return of investor confidence following the Iran-US ceasefire agreement have provided crucial support to the rupee's recovery, indicating that future market performance will depend heavily on global political developments. As per Geojit Investments, resistance was seen near the 23,950 level, with declines towards the 23,822–23,693 zone potentially attracting buying interest.
