The Indian rupee rose by 24 paise to 94.92 against the US dollar on Thursday. A dip in global crude oil prices and falling US Treasury yields provided relief, while continued intervention from the Reserve Bank of India helped curb volatility.
The Indian rupee recorded a gain of 24 paise on Thursday, trading at 94.92 against the US dollar. This recovery comes as global factors have temporarily eased some of the pressure on the currency.
Two primary drivers are influencing this move: a decline in global crude oil prices and a cooling in US Treasury yields. India imports a large portion of its oil requirements, and when global oil prices drop, the country needs fewer dollars to pay for these imports. This reduces the selling pressure on the rupee in the currency market. Brent crude oil prices were trading near $104.41 per barrel, down from a recent high of $106.11.
Additionally, the rise in US Treasury yields has paused. When these yields rise, investors often move money out of emerging markets like India and into US assets, which weakens the rupee. The recent cooling of these yields has given the currency some breathing room.
The Reserve Bank of India continues to play a significant role in managing volatility. The central bank has indicated it retains a range of tools to prevent disorderly movements in the currency. State-run banks have been active in the market, selling dollars on behalf of oil marketing companies. This intervention helps absorb excess demand for dollars, which otherwise could have caused a sharper decline.
While the currency has seen a recovery, it still faces technical resistance near the 95-per-dollar mark. Market participants anticipate that the rupee will likely trade within a range of 94.75 to 95.75 in the near term. The sustainability of this recovery remains a point of discussion among institutional traders, who are watching whether the central bank will tolerate the currency moving back into sub-95 levels or if it will continue its active intervention strategy. For now, corporations involved in foreign trade are actively adjusting their hedging plans as they wait for more clarity on global interest rate expectations.