Rupee Opens Stronger at ₹85.15 Amid Oil Price Dip and Geopolitical Tensions​

The Indian rupee opened 10 paise higher at ₹85.15 against the US dollar on Wednesday, supported by declining global oil prices and sustained foreign institutional investor (FII) inflows, despite escalating geopolitical tensions between India and Pakistan.​

Oil Prices Provide Temporary Relief

Brent crude futures fell by 1.18% to $63.49 per barrel, while WTI crude dropped 1.39% to $59.58 per barrel. The decline in oil prices offers temporary relief to the rupee, as India is a major importer of crude oil. ​

Foreign Inflows Support Currency

FIIs remained net buyers in the Indian equity market, purchasing stocks worth ₹2,385.61 crore on Tuesday, bringing the 10 day total to ₹37,359 crore. These inflows have provided support to the rupee amid global uncertainties. ​

Geopolitical Tensions Cast a Shadow

Tensions escalated following a deadly militant attack in Pahalgam on April 22, for which India holds Pakistan responsible. In response, Prime Minister Narendra Modi granted the armed forces "complete operational freedom" to determine the mode, targets, and timing of India's response. A Cabinet Committee on Security meeting is scheduled for 11 AM today to discuss the situation. Market participants are closely monitoring developments, as heightened tensions could impact investor sentiment and the rupee's stability.​

Global Factors Influence Currency Dynamics

The US dollar index, which measures the greenback against a basket of major currencies, was up 0.05% at 99.28 as of 9:10 AM IST. However, the index is poised for its weakest monthly performance since November 2022, potentially offering some support to emerging market currencies like the rupee. Additionally, US Treasury Secretary Scott Bessent indicated that India could become the first country to sign a trade deal with the United States, adding optimism to the currency's outlook. ​

Outlook: Cautious Optimism Amid Uncertainty

While the rupee has shown resilience supported by declining oil prices and FII inflows, the ongoing geopolitical tensions introduce a layer of uncertainty. Market participants are advised to remain vigilant, as developments on the India-Pakistan front could influence the rupee's trajectory in the near term. The rupee is expected to trade within a wide range of ₹84.90 to ₹85.60, with volatility likely as reports on the border situation emerge.

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