Mumbai — The Indian rupee climbed to nearly a one-month high against the U.S. dollar Monday as falling crude oil prices improved the country’s inflation and import outlook, while foreign investment inflows provided additional support.
The rupee strengthened about 0.3% to 95.13 per dollar, its highest level since July. It had closed at 95.38 in the previous session after gaining more than 1% last week.
Market analysts said the sharp drop in oil prices helped strengthen the currency because India relies heavily on imported crude. Lower energy costs can reduce the country’s import bill and ease inflationary pressure.
Analysts also said near-daily dollar sales by the Reserve Bank of India had eased concerns that the rupee could weaken beyond 97 per dollar.
Oil prices fell amid hopes of an agreement to end the conflict involving Iran. U.S. President Donald Trump refrained from ordering a new attack and instead sought a deal aimed at limiting Tehran’s nuclear ambitions and reopening the Strait of Hormuz.
Brent crude, the international oil benchmark, fell about 5% to $83.50 a barrel. U.S. West Texas Intermediate crude dropped about 7% to below $79 a barrel.
Foreign investment flows also supported the rupee. Overseas investors were net buyers of Indian equities in July, marking their first monthly net purchase since February.
Data released over the weekend showed that measures announced by Indian authorities last month attracted about $41 billion in inflows, driven largely by nonresident deposits.
Indian stock markets also traded higher Monday, with benchmark indexes gaining as much as 1% in morning trading amid buying in consumer goods, banking, metals and cement shares. (Source: IANS)
