The Indian rupee surged nearly 1% against the US dollar on Monday, its sharpest single-day gain in months, buoyed by signs of de-escalation in Middle East tensions and a sharp decline in global crude oil prices.
At close, the INR settled at 82.40/USD, up from 83.15 in the previous session — a welcome break from recent volatility triggered by geopolitical tensions and inflation concerns.
🌍 What Triggered the Rally?
✅ 1. Israel-Iran Ceasefire Announcement
Global markets cheered the unexpected ceasefire agreement between Israel and Iran, calming fears of prolonged conflict that could have disrupted oil supply chains. This reduced the geopolitical risk premium and boosted investor confidence in emerging markets like India.
✅ 2. Crude Oil Prices Fall Below $76
Brent crude fell by nearly 4% to $75.80 per barrel, easing inflationary pressures for oil-import-dependent India. Lower oil prices improve India’s current account balance, positively impacting the rupee.
✅ 3. FII Inflows Resume
Foreign Institutional Investors (FIIs) turned net buyers for the second consecutive session, injecting nearly ₹1,800 crore into Indian equities, further strengthening the currency.
💱 Rupee Performance Snapshot
| Date | INR/USD Exchange Rate | % Change |
|---|---|---|
| June 21, 2025 | 83.15 | — |
| June 24, 2025 | 82.40 | +0.90% |
📈 Expert Take
“The rupee’s sharp move is a reflection of both macro relief and dollar weakness. If crude stays below $78, we may see INR trade in a stronger band of 81.80–82.60 in the short term,” said a senior currency strategist at ICICI Securities.
🔮 Outlook Ahead
Stable oil prices and continued foreign inflows could support further gains
Market watchers advise caution as US Fed stance and China’s economic data could influence future trends
RBI may intervene if volatility returns
❓ FAQ Section
Q1: Why did the rupee rally today?
A: The rupee rose nearly 1% due to easing geopolitical tensions from the Israel-Iran ceasefire and a sharp drop in global crude oil prices, which benefits India’s trade balance.
Q2: How much did the INR gain against the USD?
A: The rupee gained around 75 paise, or 0.90%, closing at ₹82.40 per USD.
Q3: What is the role of oil prices in the rupee’s movement?
A: India imports over 85% of its crude. A drop in oil prices reduces the import bill and strengthens the rupee by improving the current account balance.
Q4: Will the rupee continue to rise?
A: Analysts expect INR to remain in a stable-to-positive range if oil remains below $80 and foreign fund inflows continue.
Q5: What other factors can affect the rupee this week?
A: Key factors include US economic data, Fed commentary, and RBI’s intervention in the forex market.
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Reported by Benny on June 24, 2025.
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