Indian Rupee Hits 4-week High

The Indian rupee strengthened to around 95 per dollar, reaching four-week highs after steadying in the previous session, as a sharp decline in crude oil prices boosted sentiment amid signs of progress in US-Iran talks. The currency was further supported by the Reserve Bank of India's regular market intervention and robust capital inflows linked to measures announced in June. Brent crude extended its retreat from a recent peak of around $102 per barrel to $78.80, after tumbling 5.2% on Tuesday, easing pressure on India's oil import bill. Meanwhile, investors awaited the RBI's policy decision, with economists widely expecting the central bank to leave interest rates unchanged, as reduced uncertainty surrounding growth, inflation, the West Asia conflict, and the monsoon outlook limited the scope for policy surprises. Over the past four weeks, the USD/INR pair has declined 0.36%, while remaining 8.31% higher than a year earlier.

The Indian Rupee touched 94.96 against the USD, the highest since July 2026. Over the past 4 weeks, US Dollar Indian Rupee lost 0.36%, and in the last 12 months, it increased 8.31%.

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.