Rupee jumps 43 paise to open at 94.68 against dollar, strongest level since May 8

The Indian rupee appreciated by 43 paise at the opening on Monday (June 15) to 94.68 against the US dollar, compared with its previous close of 95.11, marking its strongest level since May 8.The sharp gain came after a reported peace deal between the United States and Iran eased concerns over a prolonged conflict in the West Asia, triggering a decline in crude oil prices and boosting sentiment across Asian markets.

Brent crude fell 4.5% to $83.40 a barrel, its lowest level in more than three months, after US President Donald Trump and Iran’s deputy foreign minister said they had reached an agreement to end the war and reopen the Strait of Hormuz.
Asian equities and currencies advanced, while the dollar index and US Treasury yields declined as investors welcomed the prospect of reduced geopolitical tensions.Lower oil prices are particularly significant for India, one of the world’s largest crude importers, as they help reduce the country’s import bill and support the rupee. Market participants said that if crude prices remain around the $80-per-barrel mark, pressure on the Indian currency could ease further and improve the outlook for foreign portfolio inflows.

The more than three-month conflict between the US and Iran had weighed on the rupee by dampening foreign investor appetite for Indian assets and raising concerns over India’s growth outlook.

The rupee had already begun to recover after the Reserve Bank of India announced measures at its recent monetary policy meeting to attract dollar inflows, including the revival of a 2013-style window to mobilise funds from non-resident Indians. The latest fall in oil prices is expected to provide additional support to the domestic currency.

–With Reuters inputs