Rupee Steady on Hedging Demand

The Indian rupee hovered around 95.34 per dollar, pausing its recent gains as renewed importer dollar demand and uncertainty over US-Iran diplomacy limited further appreciation. Companies stepped up hedging of future import payments after the currency's swift recovery, with traders noting that levels close to 95 were attractive for corporate dollar purchases. Meanwhile, oil prices edged higher after tumbling in the previous session as concerns over Middle East supply disruptions persisted. Sentiment remained cautious after US President Donald Trump said he was holding off on fresh attacks on Iran while talks continued, but Iran denied any negotiations were underway, keeping the risk of renewed tensions elevated and pressuring the oil-sensitive rupee. Despite the pause, the currency remained near its strongest level in four weeks, its biggest weekly gain since March, supported by the RBI's near-daily dollar sales.

The Indian rupee climbed to around 95.32 per dollar, extending last week's gains to a near four-week high as lower oil prices reinforced optimism from the Reserve Bank of India's sustained market intervention. Brent crude prices fell 4.7% to below $84 a barrel after US President Donald Trump said plans for an attack on Iran had been shelved to allow negotiations on a nuclear deal, easing concerns over India's import bill and inflation outlook. The rupee rallied 1.2% last week, its strongest weekly gain since March, as the RBI's near-daily dollar sales eased fears of a slide beyond 97 per dollar. Additional support came after RBI data showed measures to attract capital inflows had brought in about $41 billion, including $36.7 billion through foreign currency non-resident deposits, bolstering the central bank's capacity to defend the rupee. Meanwhile, the RBI's net foreign exchange forward book narrowed slightly to $103.3 billion in June, reflecting lower near-term dollar liabilities.

The Indian rupee rose to around 95.38 per dollar, extending gains for a fifth consecutive session to a three-week high as the greenback weakened and crude oil prices continued to retreat. Pressure on India's import bill eased after the US dollar posted its biggest one-day decline in three months, while Brent crude futures slipped about 1% to around $88 per barrel amid expectations of a Saudi Arabia-led maritime coalition to strengthen security cooperation in the Red Sea. The currency also remained supported by persistent intervention from the Reserve Bank of India, with traders pointing to continued dollar sales after the central bank intervened aggressively last Friday. Still, market participants cautioned that further appreciation could remain limited if oil prices rebound amid ongoing tensions between the US and Iran.