The rupee appreciated by 34 paise to close at 95.26 against the US dollar on Monday, recording gains for the third straight session, amid improving global sentiment over a possible peace deal between the US and Iran.According to news agency PTI, the rupee rose with growing optimism about easing tensions in West Asia and prospects for progress in negotiations related to the Strait of Hormuz, a major global oil shipping route.In the interbank foreign exchange market, the rupee opened at 95.36 against the dollar and touched an intraday high of 95.12 before settling at 95.26.On Friday, the local currency closed 75 paise strong at 95.60 against the dollar.
RBI Governor’s remarks boost sentiment
Forex traders said the rupee also received support after Sanjay Malhotra assured that the Reserve Bank of India would take necessary steps to ensure orderly movement in the foreign exchange market.“The central bank will do whatever is required to ensure orderly price discovery in the forex market,” the RBI Governor said during the interaction, as quoted by PTI.Malhotra also stated that the rupee was not overvalued and could in fact be undervalued after its recent depreciation.
US-Iranian negotiations raise the global mood
Traders also reacted positively after US President Donald Trump said the US and Iran had “pretty much negotiated” a peace deal aimed at ending the nearly three-month-old conflict.Trump said he advised negotiators “not to rush into an agreement” and that “both sides should take their time and get it right.”Meanwhile, US Secretary of State Marco Rubio said that India and the US are close to finalizing an interim trade agreement, adding to positive market sentiment.
Crude oil falls and stocks rise
The dollar index, which measures the US currency against a basket of six major currencies, fell 0.26 percent to 99.98.Brent crude prices also fell sharply, falling 5.10 percent to $98.26 per barrel in futures trading.Local stock markets rose strongly on Monday. The BSE Sensex rose 1,073.61 points to settle at 76,488.96, while the NSE Nifty rose 312.40 points to close at 24,031.70.Foreign institutional investors (FIIs) turned net buyers during the session and bought shares worth Rs 821.75 crore, according to exchange data.Meanwhile, India’s foreign exchange reserves fell by $8.094 billion to $688.894 billion for the week ending May 15, according to Reserve Bank of India data released on Friday.