Indian Rupee Extends Gains to Two-Week High
The Indian rupee strengthened to around 94.5 per dollar, reaching a two-week high as a sharp decline in crude oil prices eased concerns over India’s import bill and external balance. Brent crude fell below $100 amid hopes that the US midterm election results could increase pressure for a negotiated end to the Iran conflict, potentially reducing supply-disruption risks and dollar demand from oil importers. At the same time, the Reserve Bank of India’s measures, including a special foreign exchange window for state-owned oil refiners and its FCNR(B) deposit scheme, have helped contain spot-market dollar demand and mobilize foreign currency. Meanwhile, declining foreign exchange reserves and rising forward dollar liabilities highlight the limits of continued intervention in addressing India’s underlying external vulnerabilities. Moreover, persistent foreign portfolio outflows and tighter global financial conditions continue to weigh on the currency.
The Indian rupee strengthened to around 94.5 per dollar, reaching a two-week high as a sharp decline in crude oil prices eased concerns over India’s import bill and external balance. Brent crude fell below $100 amid hopes that the US midterm election results could increase pressure for a negotiated end to the Iran conflict, potentially reducing supply-disruption risks and dollar demand from oil importers. At the same time, the Reserve Bank of India’s measures, including a special foreign exchange window for state-owned oil refiners and its FCNR(B) deposit scheme, have helped contain spot-market dollar demand and mobilize foreign currency.
Meanwhile, declining foreign exchange reserves and rising forward dollar liabilities highlight the limits of continued intervention in addressing India’s underlying external vulnerabilities. Moreover, persistent foreign portfolio outflows and tighter global financial conditions continue to weigh on the currency.