Mumbai: The Indian rupee surged to a near one-month high on Monday as crude oil prices fell by up to 7 per cent to below the $80-a-barrel mark amid hopes of a deal to end the Iran conflict, while strong foreign inflows further supported the currency.
The domestic currency strengthened nearly 0.3 per cent to 95.13 against the US dollar, its highest level since July. It had settled at 95.38 against the US dollar in the previous session and had gained more than 1 per cent last week.
According to market experts, the rupee strengthened to around 95.1 per dollar as lower crude prices improved India’s inflation and import outlook.
They noted that the RBI’s near-daily dollar sales helped ease concerns of the currency weakening beyond the 97-per-dollar level.
The rupee’s gains came as oil prices declined sharply after US President Donald Trump refrained from launching a fresh attack on Iran and instead sought a quick deal aimed at halting Tehran’s nuclear ambitions and reopening the Strait of Hormuz.
Brent crude — the international oil benchmark — fell around 5 per cent to $83.5 per barrel.
Similarly, US West Texas Intermediate (WTI) crude declined about 7 per cent to remain below $79 per barrel.
In addition, foreign investors were net buyers of Indian equities in July which is their first monthly net purchase since February.
Separately, data released over the weekend showed that measures announced by Indian authorities last month have attracted total inflows of $41 billion, driven largely by non-resident deposits.
Additionally, domestic equity markets also traded higher on Monday, with benchmarks jumping up to 1 per cent in the morning trade amid buying in FMCG, banking, metal and cement shares.
(IANS)
