Rupee Rallies on Diplomatic Hopes, Crude Price Decline

The Indian rupee posted a modest weekly gain, appreciating approximately 0.2% against the US dollar. The currency's performance was driven by a decline in crude oil prices and hopes of a diplomatic breakthrough between the United States and Iran.

The rupee traded in a range of 94.92 to 95.40 during the week, supported by persistent intervention from the Reserve Bank of India (RBI) and strong foreign exchange inflows under the central bank's balance of payments strengthening measures.

On Monday, the rupee opened with a significant gap-up, surging 31 paise to 95.12 against the US dollar in early trade. However, it eventually ended flat at 95.3375 per dollar after retreating from a three-week high hit in early trade due to dollar demand from importers and state-run banks.

The rupee continued its upward trend throughout the week, reaching its strongest level since July 1 on Wednesday. The currency's rally was largely driven by falling crude oil prices, with Brent crude declining from around $102 per barrel to below $79.