Rupee Gains 20 Paise To Close At 95.58 As Oil Prices Fall, Iran Talks Lift Sentiment

The rupee strengthened 20 paise to close at 95.58 against the US dollar on Tuesday, helped by a sharp decline in crude oil prices and improved sentiment across global markets.

The Indian currency opened at 95.75 and moved higher during the session, touching 95.55 before settling at 95.58. It had gained 18 paise on Monday to close at 95.78.

The latest recovery came as oil prices fell following reports that Iran could reopen the Strait of Hormuz within seven days if the US lifts its port blockade and eases military pressure. The development raised hopes that diplomatic efforts could reduce tensions surrounding the US-Iran conflict.

Lower crude prices are important for India because the country imports a large share of its oil requirements. A sustained fall in global oil prices can reduce the pressure on India's import bill and, in turn, support the rupee.

Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the rupee gained after the reported developments involving the Strait of Hormuz. He also pointed to declines in the US dollar index and US Treasury yields.

The dollar index was at 100.34, down 0.08 per cent, while Brent crude futures fell 1.14 per cent to USD 99.20 a barrel.

However, the currency's recovery remains vulnerable to geopolitical developments. Fresh tensions in the region could push oil prices higher again and put pressure on the rupee. Choudhary expects the USD-INR spot rate to remain in the 95.30-95.80 range.

Domestic equities offered little support, with the Sensex falling 329.91 points to 74,529.08 and the Nifty declining 85.30 points to 23,329.

Meanwhile, foreign investors remained sellers, offloading Rs 576.20 crore of Indian equities on Monday. Separately, government data showed growth in eight core infrastructure sectors slowed to 4.8 per cent in August, from 6.2 per cent a year earlier.