Rupee Rebounds as Oil Price Rally Hits Pause

The Indian Rupee (INR) has rebounded against the US Dollar (USD), with the USD/INR pair correcting to near 95.75 after reaching a seven-week high of 96.10 on Thursday.

The rebound is due to a pause in the rally in oil prices and US Treasury Yields, which have been driven up by concerns over tight energy supply and economic growth.

MCX Crude Oil contract expiring on September 21 trades at around Rs. 9,688, down from its multi-month high of Rs. 10,238 posted earlier this week.

Analysts at Deutsche Bank note that the improvement in the outlook for oil flows out of the Middle East has resulted in a pullback move in oil prices, with Saudi Arabia increasing tanker loadings and ramping up sales of crude from just outside the Strait of Hormuz.