USD/INR: Rupee Stabilises After RBI Support, Opens Stronger

The Indian rupee began Tuesday, April 7, on a firmer note at 93 per US dollar, compared to its previous close of 93.06 on Monday. The marginal gain was supported by central bank-backed unwinding of arbitrage positions, which helped stabilise the currency.

Volatility Eases After Sharp Swings

The opening comes after a period of significant volatility, during which the rupee witnessed wide intraday movements, including a session with a nearly 3-rupee range. Market conditions showed signs of calming on April 6, with the currency trading within a tighter band of about 30 paise, indicating improving stability.

Market participants believe the rupee may be finding a near-term equilibrium around the 93-per-dollar level. Recent intervention by the Reserve Bank of India helped the currency recover from levels near 95, while continued unwinding of positions by banks is expected to provide additional support in the short term.

Oil Prices and Geopolitics in Focus

Despite domestic support, external risks continue to weigh on the outlook. Rising geopolitical tensions, particularly involving Iran, have pushed Brent crude prices to around $111 per barrel. Given India’s dependence on oil imports, elevated crude prices typically exert downward pressure on the rupee.

Concerns have intensified after former US President Donald Trump warned of serious consequences if Iran fails to meet a deal deadline, raising the risk of disruptions in the region, including the strategically important Strait of Hormuz.

Outlook

Analysts suggest that while domestic factors may help anchor the rupee in the near term, global uncertainties are likely to keep it under pressure. Elevated crude prices and geopolitical risks could maintain higher risk premiums, limiting any significant appreciation in the currency.

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