Rupee gains for second day as crude prices fall below $100 per barrel | Economy & Policy News
The Indian rupee strengthened for the second straight day against the dollar on Thursday, aided by a fall in crude oil prices after reports indicated that the United States and Iran were moving closer to a temporary understanding to halt hostilities. The development prompted dollar sales and short covering in the domestic currency market.
The rupee closed at 94.25 per dollar, gaining 0.39 per cent on the day against the previous close of 94.61 per dollar. Brent crude prices fell below $100 per barrel, touching an intraday low of $95.66 per barrel.
The benchmark 10-year Indian government bond yield ended at 6.93 per cent, 1 basis point higher than the previous close.
Traders said the move in oil prices triggered stop-losses on bearish rupee positions, while dollar sales in the non-deliverable forward (NDF) market further supported the local currency. Over the past two trading sessions, the Indian unit has gained more than 1 per cent against the greenback.
“Stop-losses on short rupee positions, alongside dollar sales in the non-deliverable forward market, also supported the domestic currency. The broader decline in oil prices lifted Asian currencies across the board,” said Abhishek Goenka, founder and chief executive officer of IFA Global.
The rupee was among the best-performing Asian currencies on Thursday, although the Philippine peso and Malaysian ringgit posted stronger gains.
The Indian unit, which fell more than 4 per cent in March after the West Asia conflict began, has gained 0.6 per cent since April. So far in 2026, however, it has weakened 4.64 per cent.
Elevated oil prices are expected to result in a higher balance of payments deficit, estimated at $68 billion in FY27, according to a report by Nomura. Some media reports suggested that the Reserve Bank of India (RBI) is considering foreign currency deposit mobilisation schemes to bolster the rupee.
Nomura said India would need policy measures to plug the widening balance of payments deficit. It also noted that since dollar interest rates are higher now compared with 2013, when an FCNR(B) swap window was announced, the RBI would need to provide a higher subsidy to make the scheme attractive for banks.
Dilip Parmar, senior research analyst at HDFC Securities, said the rupee gained for the second consecutive session as softer crude prices reduced pressure on inflation and weakened the dollar’s safe-haven appeal.
“The local currency also found support through active short covering and healthy dollar inflows via domestic banks,” Parmar said, adding that spot USD/INR faces immediate support at 93.87 and resistance at 94.60 in the near term.
Meanwhile, the RBI received tepid demand at the four-day variable rate repo (VRR) auction. Banks bid ₹10,795 crore against the notified amount of ₹75,000 crore.
