Rupee Gains 26 Paise To 94.90/$, Falling Crude And Bond Inflows Support Early Forex Trade

Mumbai: The Indian rupee opened stronger on Thursday and gained 26 paise against the US dollar in early trade.

At the interbank foreign exchange market, the rupee opened at 94.95 and later touched 94.90 per US dollar.

This marked a recovery after the domestic currency had fallen sharply in the previous session. On Wednesday, the rupee had weakened by 60 paise to close at 95.16 against the dollar.

Crude Prices Offer Support

A major reason behind the rupee’s rise was the fall in crude oil prices.

Brent crude, the global oil benchmark, declined 1.13% to $70.76 per barrel in futures trade.

Lower oil prices are positive for India because the country imports a large part of its crude oil needs. Cheaper crude helps reduce import costs and supports the rupee.

Forex traders said oil prices have now returned to levels seen before the recent West Asia tensions, improving market sentiment.

Bond Inflows Improve Sentiment

Foreign investments in India’s bond market also supported the rupee.

Traders said foreign investors invested nearly $5.3 billion in Indian bonds during June.

This was the first month of positive bond inflows after three straight months of outflows.

The fresh inflows improved confidence in India’s financial markets and supported the domestic currency.

Analysts Stay Cautious

Market experts, however, remain cautious about the rupee’s near-term direction.

CR Forex Advisors Managing Director Amit Pabari said the Reserve Bank of India may continue absorbing a large part of foreign inflows instead of allowing the rupee to strengthen sharply.

He warned that if the rupee fails to gain despite positive triggers, any fresh negative development could push the USD/INR pair toward the 95.80–96.00 zone.

According to analysts, 94.80 remains an important support level for the rupee.

Market Mood Positive

The broader market sentiment remained positive.

The dollar index was almost flat at 101.38. Meanwhile, domestic equities traded higher, with the BSE Sensex rising 377 points and the Nifty 50 gaining 106 points in early trade. Foreign institutional investors sold equities worth Rs 1,140.50 crore on Wednesday.

Published on: Thursday, July 02, 2026, 11:19 AM IST