The Indian rupee gained 15 paise to close at 95.35 against the US dollar on Friday, supported by consistent foreign portfolio investment inflows. While steady buying by foreign investors in the equity market has strengthened the currency, rising crude oil prices and regional geopolitical tensions continue to limit further gains.
The Indian rupee continued its upward trend on Friday, settling at 95.35 against the US dollar. This marks the fifth straight session of gains for the domestic currency, which appreciated by 15 paise during the day. The recent strength reflects a recovery in sentiment, bolstered by active support from the Reserve Bank of India and a shift in capital flows.
Foreign portfolio investors have turned net buyers, injecting approximately Rs 7,360 crore into the Indian equity market over the last three trading days. This trend is a notable departure from previous periods of net selling, helping the rupee manage its volatility despite external pressures. Market analysts often monitor these inflows closely, as sustained foreign interest typically reduces pressure on the rupee by increasing the supply of dollars in the domestic market.
While the inflows provide a cushion, the currency remains sensitive to global economic factors. Brent crude oil prices have been trading higher at around USD 89.40 per barrel. For India, which is a major importer of crude oil, rising global energy prices often lead to increased dollar demand by oil marketing companies, which can effectively cap the appreciation of the rupee.
Beyond energy costs, regional geopolitical uncertainty in West Asia remains a point of caution for investors. The potential for disruption in supply chains or a broader rise in market risk aversion often prompts investors to move capital toward safer assets like the US dollar, which can temporarily weaken emerging market currencies like the rupee.
Domestic equity indices displayed resilience alongside the currency move. The Sensex closed higher by 166.49 points, ending at 78,094.64, while the Nifty rose 66.45 points to settle at 24,383.60. Investors moving forward will likely track whether the trend of foreign equity inflows remains consistent and how global crude oil prices react to the evolving geopolitical situation. The USD-INR pair is expected to hover within the range of Rs 95.00 to Rs 95.60 in the near term, depending on these underlying global and domestic factors.