Rupee surges 58 paise amid sharp fall in crude oil prices

New Delhi: The Indian rupee strengthened by 58 paise against the US dollar on Monday as global crude oil prices tumbled after US President Donald Trump announced that Washington and Tehran had finalised a peace deal and agreed to reopen the Strait of Hormuz.

The domestic currency opened at 94.70 against the greenback in the interbank foreign exchange market and further appreciated to 94.60, a gain of 58 paise from its previous close.

In the last session, the rupee had settled 67 paise higher at 95.18 against the dollar.

The US and Iran have reached an agreement to end war and reopen the Strait of Hormuz — the strategic waterway through which nearly one-fifth of the world’s crude oil supplies are transported.

Reports claim that the agreement is expected to be formally signed in Switzerland later this week.

On Truth Social, the American President said, “The Deal with the Islamic Republic of Iran is now complete. Congratulations to all.”

He added that the agreement would facilitate the reopening of the Strait of Hormuz and the removal of the US naval blockade.

According to the experts, the Indian rupee witnesses a positive bias, supported by a sharp decline in crude oil prices following reports of a US-Iran peace agreement and the reopening of the Strait of Hormuz.

“Lower oil prices are positive for India, a major crude importer, as they help reduce the country’s import bill and ease pressure on the current account deficit,” they added.

Additionally, softer US dollar sentiment, declining Treasury yields, and improving risk appetite across Asian markets have boosted regional currencies, including the rupee. While India’s inflation rose to 3.9 per cent in May, it remained below the RBI’s 4 per cent target, providing macroeconomic stability, the experts said.

They further noted that the RBI’s recent measures to attract dollar inflows, including the revival of an NRI deposit window, may further support the domestic currency.

However, market participants will closely monitor the upcoming Federal Reserve policy decision and comments from Chair Kevin Warsh for signals on the future path of U.S. interest rates, which could influence near-term rupee direction, according to experts.

Brent crude — the global oil benchmark — fell almost 5 per cent to $83 per barrel. Similarly, US WTI decreased by over 5 per cent to $80.

In addition, domestic equities witnessed strong buying interest. Benchmarks Sensex and Nifty gained over 1 per cent in early trade.

IANS