The Indian rupee inched higher on Tuesday, closing at 89.65 against the US dollar, marking a modest gain of 3 paise from the previous session. Market analysts attributed the slight rise to a weaker US dollar, which generally supports emerging market currencies like the rupee.
Despite this improvement, the currency’s gain remained limited. Traders highlighted that higher global crude oil prices and foreign portfolio outflows continued to exert pressure on the rupee, preventing a more significant rally. India, being a major importer of crude oil, often sees its currency impacted by oil price fluctuations, as higher prices increase import costs and widen the current account deficit.
The trading session witnessed the rupee moving in a narrow range, reflecting ongoing market caution amid global uncertainties. Investors are closely monitoring the dollar’s performance against a basket of currencies, crude oil trends, and domestic economic indicators.
On the broader front, the forex market has seen volatility around the 90‑per‑dollar level in recent weeks, as international economic developments, central bank policies, and investor sentiment continue to influence the rupee’s trajectory. Analysts noted that while the rupee showed resilience, any sharp swings in global crude prices or renewed foreign outflows could impact its stability.
Market participants expect the currency to continue facing mixed pressures in the near term, balancing between support from a softening dollar and challenges posed by global energy costs and capital movement.
This marginal appreciation of the rupee provides temporary relief for importers and companies with dollar-denominated liabilities, but overall, the currency’s performance will depend on both global market cues and domestic economic factors in the coming weeks.
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