Rupee rallies 50 paise as cheaper crude lifts sentiment

Mumbai: The Indian rupee logged its best day in nearly a month, climbing nearly 50 paise against the dollar Tuesday, amid reports that Saudi Arabia would reduce crude oil prices for Asian buyers as shipments fully resume through the Hormuz Strait, traders said.

“The rupee traded stronger after reports said that Saudi Arabia cut its August crude oil prices for Asian buyers amid easing geopolitical tensions in West Asia,” said Jateen Trivedi, VP currency research analyst, LKP Securities. “This improved sentiments and pushed short covering in rupee.”

The rupee ended at 94.96 against the dollar Tuesday, compared with 95.40 Monday. Brent crude oil futures were trading around $72.88 a barrel.

Oil prices have fallen nearly $50 a barrel from their recent peak, when the rupee itself was tantalizingly close to breaching the 97 mark to the dollar.

Resumption of foreign portfolio investor (FPI) flows into Indian equities also helped stabilise the rupee.

“The rupee was trading with a positive sentiment and FPI outflow in equity too has eased. The currency has reversed all losses from the past three days,” said Dilip Parmar, currency research analyst at HDFC Securities.

The rupee traded in the range of 95.48 and 95.95 Tuesday, and the central bank likely sold dollars around 95.45 levels.The dollar index eased modestly to 100.9, from 101.2 a day ago. A reading above 100 indicates a relatively stronger dollar.

The rupee is expected to trade in the range of 94.75 to 95.50 on Wednesday. The rupee has depreciated 0.4% in the fiscal year so far.