Rupee strengthens to close at a six-and-a-half-month high

The Indian rupee (INR) closed at a six-and-a-half-month high of 93.90 per US dollar (USD) on Friday, as Foreign Portfolio Investors (FPIs) made net purchases in the equity markets, crude oil prices fell, and the US dollar weakened. This improvement comes as hopes rise that the Middle East conflict may ease following the US presidential election results, with President Donald Trump's Republican Party facing a setback in the mid-term elections.

The rupee opened at 93.90 per USD, up 57 paise from the previous close of 94.47, reaching a high of 93.8200 and a low of 94.5150 intraday. FPIs net bought $1.724 billion on Friday, contributing to the positive sentiment for the Indian equity market following Democrats' victory in the mid-term elections. The decline in crude oil prices, which remain below the $100 per barrel mark, further supports the rupee, as India's crude oil imports account for nearly 90% of its requirements.

Experts believe that the rupee's strength is driven by the positive global risk sentiment post-US election, the softening of crude oil prices, and expectations of an early resolution to the West Asia crisis. Additionally, the return of foreign portfolio investments and a weaker dollar have played a role in the rupee's recovery.