Rupee Reaches Two-Week High, Opens at Rs 95.34 per Dollar

Indian Rupee Strengthens as Brent Crude Prices Dip Below $100

The Indian rupee opened 35 paise higher on May 25, as Brent crude prices traded below $100 per barrel for the first time in two weeks. This shift was largely due to a potential war-ending deal between the United States and Iran, which boosted investor sentiment.

The local currency was trading at Rs 95.34 per dollar, a significant improvement from the previous trading session's rate of Rs 95.69 per dollar. This marked the third consecutive session of rupee appreciation, with the currency reaching a two-week high.

Brent crude prices had fallen by more than 4 percent to trade near $98 per barrel. The decline in crude prices was attributed to the US and Iran's progress towards a peace deal, despite some fundamental differences between the two countries, such as the blockade around the Strait of Hormuz and supply chain disruptions.

Read also: US Man Arrested at Anti-Immigrant Protest for Vandalizing Indian Flag Amid Chants of Anti-India Slogans

In a recent media interaction, RBI Governor Sanjay Malhotra struck a relatively reassuring tone, suggesting that the rupee may now be "undervalued" rather than overvalued. This was supported by the Real Effective Exchange Rate (REER) coming down to 91.00, which contributed to improved sentiment.

Amit Pabari, managing director at CR Forex Advisors, noted that if crude oil prices remain contained and global risk sentiment continues to improve, there is a strong possibility that the rupee may gradually appreciate toward the Rs 94.80 – Rs 94.50 zone in the near term.