Mumbai: The Indian rupee strengthened to its highest level in nearly a month on Monday, supported by a sharp decline in global crude oil prices and sustained foreign capital inflows.
The domestic currency appreciated nearly 0.3 per cent to 95.13 against the US dollar, its strongest level since July. In the previous trading session, the rupee had settled at 95.38 against the dollar after posting a gain of more than 1 per cent last week.
Market analysts attributed the rupee’s rise to the steep fall in crude oil prices, which is expected to ease India’s import bill and inflationary pressures. They also pointed to the Reserve Bank of India’s regular intervention through dollar sales, which has helped prevent the currency from weakening beyond the 97-per-dollar mark.
Global oil prices fell sharply after US President Donald Trump refrained from launching a fresh military strike on Iran and instead pushed for a diplomatic agreement aimed at curbing Tehran’s nuclear programme and reopening the Strait of Hormuz.
Brent crude, the global benchmark, dropped about 5 per cent to around $83.5 per barrel, while US West Texas Intermediate (WTI) crude fell nearly 7 per cent to trade below $79 per barrel.
The rupee also received support from continued foreign investment in Indian markets. Foreign portfolio investors remained net buyers of Indian equities in July, marking their first month of net purchases since February.
Data released over the weekend further showed that measures introduced by Indian authorities last month attracted total inflows of about $41 billion, largely driven by non-resident deposits.
Meanwhile, domestic equity markets also traded in positive territory on Monday morning, with benchmark indices rising by as much as 1 per cent, led by gains in FMCG, banking, metal and cement stocks.
With inputs from IANS