Mumbai: The Indian rupee continued its upward journey on Monday, rising by 47 paise to settle at 94.71 against the US dollar. The gain came after a strong 67-paise rally on Friday, reflecting improving investor confidence and favourable global developments.
At the interbank foreign exchange market, the rupee opened at 94.70 and moved between 94.45 and 94.77 during the day before ending at 94.71.
US-Iran Peace Deal Lifts Sentiment
The biggest trigger for the rupee's rise was the announcement by US President Donald Trump that the US and Iran had finalised an agreement to end their 107-day conflict.
The proposed deal is expected to reopen the Strait of Hormuz, a crucial route that carries nearly one-fifth of global oil supplies. The agreement is likely to be signed in Switzerland on June 19.
The development eased fears of supply disruptions and boosted risk appetite across global financial markets.
Crude Oil Prices Fall Sharply
Following the announcement, global crude oil prices witnessed a sharp decline.
Brent crude futures dropped nearly 5% to trade around $82.99 per barrel. Lower oil prices are particularly positive for India, one of the world's largest crude oil importers.
Market experts believe falling crude prices could help reduce inflationary pressures and improve India's current account balance.
Dollar Weakens, Equities Rally
The US dollar also weakened against major global currencies. The dollar index slipped 0.20% to 99.65, providing additional support to emerging market currencies, including the rupee.
Meanwhile, Indian stock markets witnessed strong buying. The Sensex surged 1,126.72 points to close at 76,654.67, while the Nifty climbed 231 points to end at 23,853.90.
Outlook Remains Positive
According to market analysts, lower crude oil prices, easing geopolitical tensions and improving risk sentiment could continue to support the rupee in the near term.
Experts expect the USD-INR pair to trade in the 94.20-94.95 range on Tuesday, with investors closely monitoring global developments, capital flows and commodity prices.
