The Indian rupee started the week on a strong note after gaining 28 paise against the US dollar. On Monday, as the market opened, the rupee started at 96.25 against the US dollar, helped by a fall in global crude oil prices. Brent crude dropped to nearly $92 per barrel (a sharp 4.17% decline), easing pressure on India's import bill and lifting market confidence.
The domestic currency had closed Friday at 96.53 against the dollar. Monday's jump marked one of its strongest recent gains. Traders said lower oil prices and a weaker US dollar supported the rupee. The dollar index, which measures the US currency against a basket of six major currencies, is now down 0.26% to 101.04.
Market experts say the biggest reason behind the rupee's rise is the drop in crude oil prices. India imports most of its crude oil. When oil becomes cheaper, the country spends less on imports. This reduces the demand for US dollars and supports the rupee.
Regarding this, Mike Waltz, the US ambassador to the United Nations, has opined that US President Donald Trump is giving ‘it a little bit of room.’ He further added, “We've had both Oman and Iran, and a number of our other negotiators, engaged at every level, from the most senior levels all the way down to the technical level over the past few weeks and particularly in the past few days.”
At the same time, experts suggested that future moves will depend on global events, including oil prices, US economic data, and decisions by major central banks. These factors will continue to influence the foreign exchange market.
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A fall in crude oil prices does more than support the rupee. It can also reduce transportation costs as fuel becomes cheaper. When transport costs fall, moving food and other goods becomes less expensive.
Over time, this may help slow the rise in everyday prices. If crude oil stays lower for a longer period, inflation could ease further. That would benefit both businesses and consumers, while giving the Indian economy more room to grow.