Rupee rises for a 3rd day as crude falls

Kolkata: The rupee on Tuesday advanced against the dollar for the third straight day as an initial peace pact on West Asia, scheduled to be inked later this week in Europe, caused oil prices to retreat further amid expectations that reopening of the Hormuz channel would help restore disrupted energy supplies within weeks, if not months.

The rupee climbed 15 paisa to close at 94.56 a dollar, having traded in a narrow range through the day when yields on the benchmark bond showed signs of consolidation, retreating to 6.86%. Crude oil prices fell to about $80 a barrel, their lowest in three months, although still higher than the $67 a barrel when hostilities began in Iran.

“The Indian rupee continues to exhibit a firm undertone, extending its northbound trajectory amid a favourable macro backdrop,” Dilip Parmar, a research analyst with HDFC Securities said.

“The decline in crude oil prices has provided meaningful support to the currency by easing external sector pressures. Concurrently, a pickup in global risk appetite has reinforced flows into emerging market assets, benefitting regional currencies, including the rupee,” he added.

The rupee opened the day at 94.61 against the previous close of 94.71 and moved within a narrow band of 10 paise ahead of the US Federal Reserve’s policy announcement scheduled on June 17.