The Indian rupee strengthened against the US dollar on Tuesday, reversing a recent slide that had pushed the currency to a two-month low.
The recovery was driven by a pullback in global oil prices, as markets digested growing hopes for diplomatic engagement between the United States and Iran.
Traders noted that the currency’s firming reflects a broader easing of risk sentiment linked to the Middle East tensions.
Brent crude prices retreated from recent highs, alleviating pressure on India’s current account deficit.
The lower energy import bill, combined with renewed foreign portfolio inflows, provided immediate support for the rupee.
Traders noted that the currency’s firming reflects a broader easing of risk sentiment linked to the Middle East tensions.
Market participants are now closely monitoring the Reserve Bank of India (RBI) for potential intervention.