03.08.202604:08:51UTC+00Rupee Near Four-Week High

The Indian rupee strengthened to around 95.1 per dollar, extending the prior week’s gains to reach its highest level in nearly four weeks, as softer oil prices added to optimism over the Reserve Bank of India’s ongoing market interventions. Brent crude fell 4.7% to below $84 a barrel after US President Donald Trump said planned strikes on Iran had been put on hold to allow for renewed negotiations on a nuclear accord, easing concerns about India’s import costs and inflation outlook.

The rupee advanced 1.2% last week, its best weekly performance since March, supported by the RBI’s near-daily dollar sales, which helped allay fears that the currency could weaken beyond 97 per dollar. Sentiment was further buoyed by RBI data indicating that recent measures to attract capital inflows have brought in about $41 billion, including $36.7 billion via foreign currency non-resident (FCNR) deposits, strengthening the central bank’s ability to defend the rupee.

At the same time, the RBI’s net foreign exchange forward book edged down to $103.3 billion in June, signaling a modest reduction in its near-term dollar liabilities.