Rupee rises to 95.65 as crude eases

Traders said the opening bid for the rupee was supported by Brent easing from elevated levels as concerns about immediate supply disruptions moderated. Reports that Saudi Arabia could raise exports through the Strait of Hormuz and that part of the damaged East-West pipeline may be restored helped steady oil supply expectations, even though Brent futures were still trading above $101 a barrel.

Domestic shares were also in positive territory, which tends to support the rupee by encouraging portfolio flows and reducing near-term hedging demand. The currency opened at 95.75 and strengthened to 95.65, extending Monday’s 18-paise gain to 95.78.

The broader backdrop remains fragile. India’s foreign exchange reserves have fallen sharply in recent weeks, underscoring the strain from a stronger dollar, higher US yields and import-heavy demand for foreign currency. That leaves the rupee vulnerable if oil spikes again or if global risk appetite weakens, even after the latest bounce.

Technical readings suggest the currency is still trading in a narrow, heavily watched band rather than breaking into a decisive trend. The rupee has been hovering close to its 50-day moving average, while recent strength in the dollar has eased only modestly, keeping traders alert to any renewed move toward dollar dominance.

For investors, the immediate question is whether this is a temporary relief rally or the start of a more durable stabilization. If crude stays contained and foreign inflows improve, the rupee could find support; if not, India’s current-account and reserve dynamics will keep the currency under pressure and raise the cost of imported inflation.