Rupee touches six-week high on oil slump, RBI effect lingers

The Indian rupee climbed to a six-week high on Wednesday, supported by Brent crude slipping below $80 a barrel for the first time in more than three months, while recent steps by the central bank to buoy the currency continued to provide support.

The rupee was quoting at 94.4350 per U.S. dollar at 11:50 a.m. IST, after ‌climbing about ⁠1.2% over ⁠the past six sessions.

A major headwind for the world's third-largest oil importer is beginning to fade.


Brent crude was down 0.32% at $78.61, a level last seen in the first week of March, shortly after the conflict began, and is now less than 10% above pre-conflict prices.

Oil has been on a downward trend after the U.S. and Iran struck an interim peace deal, with Washington agreeing to ⁠lift its blockade ‌on Iranian ports and Tehran committing to restore tanker flows through the Strait of Hormuz.

"The rupee is showing strength due to Iran ⁠optimism and anticipation of inflows from RBI's recent steps," said Dipti Chitale, CEO of Mumbai-based financial advisory firm Mecklai Financial Services, adding that the rupee could tread towards 94 in the near term.

Indian policymakers have rolled out a series of measures aimed at attracting dollar inflows to support the currency, which had been under pressure in recent weeks. One of the steps, removing taxes on investments in Indian bonds, is already ‌showing results.

Overseas investors have poured more than $2 billion into domestic bonds over the past eight sessions, already surpassing the year-to-date inflows recorded before the measures were announced.

Average daily ⁠foreign equity outflows have also moderated to 22.6 billion rupees ($239.30 million) since the announcement, compared with 45.12 billion rupees during the period from the start of the Iran conflict at the end of February to June 5.

Focus turns to the U.S. Federal Reserve's policy decision, the first under Chair Kevin Warsh, due after Indian market hours. While a rate move is unlikely, the commentary is expected to influence expectations for the policy path in 2026.

($1 = 94.4425 Indian rupees)