Rupee Jumps 61 Paise to 95.92 Against US Dollar on Falling Crude Oil Prices

The Indian rupee posted its strongest single-day gain in weeks, appreciating 61 paise to settle at 95.92 per US dollar (provisional) on Monday, supported by a sharp decline in global crude oil prices, easing geopolitical tensions in West Asia, a weaker US dollar, and strong domestic equity markets.

At the interbank foreign exchange market, the rupee opened at 96.18, slipped to an intraday low of 96.27, and later climbed to a high of 95.78 before closing at 95.92, up from 96.53 on Friday. The currency had recovered 20 paise in the previous session after touching its record closing low of 96.86 on May 20.

According to forex traders, the rally was driven by a steep fall in Brent crude, which dropped 8.95% to USD 88.12 per barrel, after the United States and Iran paused hostilities and signaled a willingness to return to negotiations. The easing of tensions improved global risk sentiment and reduced concerns over energy supply disruptions.

Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan, said the rupee climbed to its highest level in three weeks, aided by lower crude oil prices, a softer US dollar, and reports of Reserve Bank of India (RBI) intervention in the currency market. He expects the USD-INR pair to trade in the ₹95.50-₹96.20 range in the near term.

The US Dollar Index, which measures the greenback against six major currencies, declined 0.20% to 101.09, further supporting emerging-market currencies, including the rupee.

Meanwhile, US President Donald Trump was "giving talks some space," according to Mike Waltz, the US ambassador to the United Nations, who said negotiations involving Oman and Iran had intensified in recent weeks.

Domestic equities also boosted market confidence, with the Sensex surging 776.01 points to 76,835.78 and the Nifty rising 228.50 points to 23,995.95. However, Foreign Institutional Investors (FIIs) remained net sellers, offloading equities worth ₹3,892.77 crore on Friday.

A stronger rupee offers several benefits for India, including lower import costs, especially for crude oil, helping ease inflation and reduce fuel prices. It also lowers the cost of overseas education, foreign travel, and servicing external debt. However, sustained appreciation can weigh on export-oriented sectors such as IT, pharmaceuticals, textiles, and gems and jewellery, as they receive fewer rupees for their dollar earnings.

Looking ahead, analysts expect the rupee to remain cautiously positive in the coming weeks if crude oil prices stay subdued, US-Iran diplomatic efforts continue, foreign investment remains supportive, and the US dollar does not strengthen sharply. However, any renewed geopolitical tensions, a spike in oil prices, or stronger global demand for the dollar could reverse recent gains.