Indian Rupee Surges on US-Iran Ceasefire

The Indian Rupee has started the week on a strong note, opening lower against the US Dollar. The USD/INR is down 0.25% to near 95.15, its lowest level in over three weeks.

This move comes as oil prices have plummeted after the announcement of a ceasefire between the US and Iran following renewed hostilities in July. India, heavily reliant on oil imports, tends to underperform in high oil price environments.

The MCX Crude Oil contract expiring on August 19 has traded over 6% lower to near Rs. 7,600.

Economists at ING expect the Reserve Bank of India to leave the policy stance unchanged at its upcoming meeting, citing that core inflation continues to run below the RBI's target and providing policymakers with sufficient room to keep policy rates unchanged while monitoring evolving risks to the inflation outlook.