The Indian rupee opened stronger on Thursday, rising 37 paise to 94.30 against the dollar compared with the previous close of 94.67. The move comes as oil prices remained under pressure, hovering near the USD 70 per barrel mark.
Crude prices continued to trade weak, with Brent around USD 72.77 and WTI near USD 69.50. The decline in oil prices has offered some support to the rupee by easing concerns around India’s import bill.
According to Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors LLP, the rupee saw sharp moves in the previous session. “The rupee made a low of 94.91 in early trade but dollar selling amid inflows pushed it higher,” he said. “It moved towards 94.59 levels before closing at 94.66.”
He noted that the rupee outperformed most Asian currencies. “Dollar sales from nationalised banks, possibly on behalf of the RBI, helped the rupee stay supported above 94.90 levels,” Bhansali said.
On global cues, Bhansali pointed to continued dollar strength. “The Dollar Index rose to around 101.75, its highest level in over a year,” he said. “Markets are still pricing in the possibility of additional US Federal Reserve rate hikes, which is supporting the dollar.”
He added that RBI intervention played a role in cushioning volatility. “While the RBI does not target a specific level, it steps in to prevent excessive movement in the currency,” he said. On oil, Bhansali said softer crude prices were helping the rupee. “Brent crude has remained around the USD 72–75 per barrel range, which reduces pressure on India’s import bill and limits upside in USD/INR,” he noted.
Foreign flows also remain supportive. “There is strong participation in Indian bonds and expectations of continued inflows, which is positive for the rupee in the medium term,” he said, adding that foreign investors were sellers in equities.
Looking ahead, Bhansali said the rupee remains in a comfortable zone. “With oil near USD 72.50 per barrel, the rupee is holding steady despite a higher dollar index and weaker Asian currencies,” he said.
He expects range-bound trading in the near term. “The rupee is likely to remain in a narrow band, with exporters having sold dollars over the past few days,” he said. “Importers may get opportunities to buy dollars near 94.10–94.20 levels, with RBI also expected to be active around those levels
