The Indian rupee appreciated 39 paise to trade at 94.89 against the US dollar in early Wednesday session, marking a notable recovery for the currency.
The move was driven by a decline in crude oil prices, which softened following reports of progress in diplomatic talks between the United States and Iran, including a pause in planned military strikes.
Forex traders indicated that investor sentiment improved as the immediate risk of supply disruption in the Middle East receded.
Lower energy import costs typically provide support for the rupee, reducing pressure on India’s current account deficit.
The currency had previously opened at 94.90 before strengthening further to the 94.89 level.
This development comes as markets closely await the Reserve Bank of India’s upcoming monetary policy decision.