Rupee's inflow-linked, RBI-backed optimism faces oil test
Seen opening at 94.55-94.60; weekly gain of 1 percentage point faces Brent above $96
The Indian rupee's rally, driven by the central bank's dollar sales and large inflows from special measures, faces a potential hurdle on Friday due to rising oil prices. The currency is anticipated to open at 94.55-94.60 per dollar, having closed at 94.4850 on Thursday after gaining 0.5% for the week, marking its highest level in two months.
Despite oil price hikes driving up US Treasury yields and sparking speculation of an early Federal Reserve rate increase, the rupee has benefited from more aggressive intervention by the Reserve Bank of India (RBI) and buoyant inflows exceeding $136 billion. However, oil prices, particularly Brent crude approaching $96 a barrel, could pose a challenge to the currency's upward trajectory as tensions escalate and hostilities between the US and Iran intensify.
The rupee is also set to gain from the broader weakness of the US dollar, fueled by expectations of a Bank of Japan interest rate hike and anticipation of US employment data.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
