The Indian rupee touched a six-week high of 94.28 against the US dollar during intraday trade on Wednesday before settling at around 94.52.
The rally was supported by a sharp decline in global crude oil prices, with Brent crude falling below the $80-per-barrel mark.
Lower oil prices are generally positive for India, one of the world’s largest oil importers, as they help reduce the country’s import bill and ease pressure on the current account.
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Heavy RBI buying seen in trade
According to market experts quoted by Financial Express, strong dollar purchases by the RBI were witnessed during trading hours, while oil companies also remained active in the market.
Analysts noted that the combination of lower crude prices and expectations of sustained foreign inflows has improved the near-term outlook for the rupee.
Investors are now awaiting the outcome of the US Federal Reserve’s policy meeting. While markets largely expect interest rates to remain unchanged, the central bank’s commentary on inflation and future rate actions could influence the dollar’s trajectory and, consequently, the rupee.
The Outlook
Currency analysts expect the rupee to trade in the 94–94.50 range in the near term.
If crude oil prices remain stable and geopolitical tensions continue to ease, some experts believe the rupee could strengthen further toward the 92–93 range against the US dollar in the coming months.
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FAQs
Q1: Why did the rupee strengthen on June 17?
Ans: The rupee gained due to lower crude oil prices and optimism over increased foreign capital inflows following RBI measures.
Q2: What level did the rupee touch against the US dollar?
Ans: The currency touched an intraday high of 94.28 per US dollar, its strongest level in six weeks.
