The Indian rupee strengthened by 5 paise to 94.53 against the US dollar in early trading on Tuesday, supported by a sharp decline in global crude oil prices and easing geopolitical tensions in the Middle East.
According to forex traders, the reduction in concerns over potential disruptions to global energy supplies has improved sentiment toward emerging market currencies, including the rupee.
Brent crude oil prices dropped by more than 6 per cent, moving closer to the USD 82 per barrel level. The fall in oil prices is seen as a positive development for India, which imports nearly 90 per cent of its crude oil requirements.
Lower crude prices generally help reduce the country’s import bill and ease pressure on the domestic currency, providing support to the rupee in the foreign exchange market.
Market participants will continue to monitor developments in global oil markets and geopolitical conditions, which are expected to influence currency movements in the coming days.
