The Indian rupee appreciated 40 paise to 95.20 against the US dollar in early trade on Monday, according to reports from The Hindu. The currency opened at 95.36 against the dollar at the interbank foreign exchange market before touching the day's high of 95.20. This follows Friday's strong performance where the rupee rose 75 paise to close at 95.60 against the US dollar. The recovery comes after the rupee had fallen 6% since the Middle East crisis began on February 28, when US and Israel launched joint strikes on Iran.
The rupee's appreciation was driven by optimism that the US and Iran were moving closer to a peace deal to end the nearly three-month war, as reported by The Hindu. Forex traders noted that the US and Iran have "largely negotiated" a peace pact, though they remain at odds over key issues including blockades on the Strait of Hormuz. US President Donald Trump has told negotiators "not to rush into a deal" and that "both sides must take their time and get it right." US Secretary of State Marco Rubio said on Sunday that India and the US are poised to soon firm up the much-awaited trade agreement that will be both "beneficial" and "sustainable" and will advance the mutual interests of both nations.
Petrol and diesel prices were raised for the fourth time in less than 10 days on Saturday, with rates increasing by around ₹7.5 to ₹8 per litre since the first hike, according to latest reports. In the latest revision, petrol prices increased by ₹2.61 per litre while diesel rose by ₹2.71 per litre. In New Delhi, petrol now costs ₹102.12 per litre, while diesel has climbed to ₹95.20 per litre. Since May 15, petrol prices have risen by roughly ₹7.5 per litre nationwide. Only three regions in India still remain below the ₹100-per-litre threshold, with Andaman and Nicobar Islands offering the cheapest petrol at ₹88.66 per litre.
US Secretary of State Marco Rubio announced that the US and India are on the verge of finalising an interim trade agreement after progress in negotiations, according to The Hindu. Rubio, currently on a four-day visit to India, made these remarks after holding wide-ranging talks with External Affairs Minister S Jaishankar that focused on boosting two-way cooperation in areas of trade, critical minerals, energy and defence. Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, stated that the trade deal will be beneficial to both the US and India. The US Trade Representative is expected to visit India very soon to finalise the agreement.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 99.04, down 0.20 per cent, as reported by The Hindu. Brent crude, the global oil benchmark, was trading down 5.43 per cent at $97.92 per barrel in futures trade. On the domestic equity market front, Sensex jumped 908.98 points to 76,317.85 in early trade, while the Nifty surged 262.65 points to 23,977.70. As Monday is a US holiday, dollar cash demand is expected to remain lower, although month-end demand could emerge. Foreign institutional investors offloaded equities worth ₹4,440.47 crore on a net basis on Friday, according to exchange data. Meanwhile, the country's forex reserves dropped $8.094 billion to $688.894 billion during the week ended May 15, the Reserve Bank of India said on Friday.
