Rupee Opens Flat at 94.35/$, Strengthens On Oil Relief, Inflow Support

The Indian rupee opened largely unchanged against the US dollar on Friday, starting the trading session at 94.35 per dollar compared to the previous close of 94.33.

Despite the flat opening, the domestic currency has shown notable resilience in recent days.

Over the past six trading sessions, the rupee has appreciated by around 1.2%, supported primarily by easing crude oil prices, which have improved sentiment toward India as a major net importer of oil.

Lower oil prices typically reduce India’s import bill, easing pressure on the current account and supporting the currency.

The US dollar index, which tracks the greenback against a basket of global currencies, has also strengthened during the week.

It moved from 99.47 at the beginning of the week to 100.91 by the end, indicating renewed dollar strength in global markets. Despite this, the rupee has managed to hold steady.

On a broader monthly basis, the rupee has gained more than 2%, recovering from earlier weakness when it had touched levels near 96.57 against the US dollar.

The recent stability reflects improved capital flows and better macroeconomic sentiment.

Brent crude oil prices have also remained subdued, trading below the $80 per barrel mark. This has provided additional support to the rupee by limiting import-related pressure on India’s external accounts.

According to a Reuters report, foreign exchange market activity is gradually shifting. Importers continue to hedge, but there has also been an increase in inflows into Indian bond markets and a slowdown in foreign equity outflows.

This has led to more balanced two-way currency flows compared to earlier periods dominated by dollar demand.

Previously, the rupee had faced sustained pressure due to one-sided dollar buying from importers and continuous foreign institutional outflows.

However, this trend is now moderating as capital inflows improve and oil prices decline following easing geopolitical tensions between the US and Iran.

Overall, rebalancing global flows, softer crude prices, and stabilising foreign investment patterns have helped the rupee regain stability in recent weeks.