The Indian rupee is set to extend its recovery, supported by a dual tailwind of falling global oil prices and sustained intervention from the Reserve Bank of India.
The currency rallied 1.2% last week, reversing a recent slide that had pushed it to a two-month low against the US dollar.
The central bank has been active in the foreign exchange market, executing near-daily dollar sales across multiple levels to stabilize the currency, according to bankers.
This aggressive defense has been crucial in halting the rupee's depreciation, but the timing of the oil price drop has provided an additional, significant boost to the central bank's efforts.
Lower crude prices are particularly impactful for India, the world's largest oil importer.
A retreat in energy costs directly reduces the country's import bill, easing pressure on the current account and reducing the volume of dollars needed to pay for essential energy supplies.