π₯ππ½π²π² Reaches Five-Week High Against US Dollar
The Indian rupee rose for a second day on Monday. It settled at 94.71 against the US dollar. This value represents a 0.4% increase from the previous close of 95.11. The currency reached a high of 94.4625 during the trading session.
Key factors influencing the currency include:
- Crude oil prices dropped over 5% to approximately $83 per barrel.
- A preliminary US-Iran agreement aims to end conflict and reopen the Strait of Hormuz.
- The Reserve Bank of India kept interest rates unchanged on June 5.
- The central bank maintained a neutral policy stance to attract dollar inflows.
India imports nearly 90% of its crude oil. Lower oil prices reduce import costs. Economists updated India's balance of payments forecasts following recent central bank measures. Many experts now predict a small surplus instead of a deficit.
The rupee decline against the dollar this year stands at 5.6%. The currency reached a record low of nearly 97 per dollar last month.
Traders note the following details:
- Lower oil prices support the rupee.
- Stronger dollar inflows provide near-term stability.
- The Reserve Bank of India holds short dollar positions of $104 billion.
- The central bank might use currency strength to reduce foreign-exchange forward positions.
Source: The Times of India