Rupee gains slightly on softer crude oil prices; opens higher at 86.01/$

Indian Rupee today: The domestic currency rose 5 paise to open at 86.01 against the dollar, after closing at 86.06 on Monday

The Indian Rupee opened slightly higher on Tuesday, but remained at the crucial 86 level as crude oil prices cooled off amid reports of easing tensions in West Asia.

 

The domestic currency rose 5 paise to open at 86.01 against the dollar, after closing at 86.06 on Monday, according to Bloomberg. Asian currencies were trading mixed against the dollar on Tuesday. 

 

As Iran-Israel clashes entered day four, US President Donald Trump urged Tehran’s evacuation on Truth Social, saying: “Iran should’ve signed the deal. What a shame and waste of life. Iran can not have a nuclear weapon.” This comes a day after a report suggested that Tehran wants to restart nuclear negotiations.

 

 

Crude oil prices retreated on Monday on optimism that the Israel-Iran war will not escalate. Brent crude price was up 0.40 per cent to $73.52 per barrel, while WTI crude prices were higher by 0.39 per cent at 72.05, as of 9:00 AM IST.  

 

The Indian rupee strengthened in the non-deliverable forward (NDF) market after Iran signalled a possible ceasefire, and it reversed course following remarks by former US President Donald Trump about a possible evacuation of Tehran, analysts said. 

 

If the rupee closes above 86.20 today or on any day, importers may trigger stop-loss levels, potentially pushing the dollar up to 86.70, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP.

 

That said, the Reserve Bank of India (RBI) has been actively intervening above the 86.20 level, selling dollars to stabilise the rupee, Bhansali said. "Oil prices remain the key driver for the currency, with foreign portfolio investors (FPIs) and oil companies buying dollars to meet their respective outflow requirements."

 

"For today, the expected range is 85.75 to 86.30, with movement largely dependent on developments in the West Asian conflict and the RBI’s actions in the currency market," Bhansali said.  

 

Meanwhile, RBI's chief Sanjay Malhotra said that if inflation is below the central bank's current projections, it could open up policy space. But he added that incoming data will be watched closely to strike "the right growth-inflation balance".

 

The dollar rose against most Group-of-10 currencies as investors weighed the rising tensions in West Asia. The dollar index, which measures the greenback against a basket of six major currencies, was up 0.18 per cent at 98.17.