Rupee Soars to Three-Week High as Oil Prices and Dollar Index Decline

The Indian rupee strengthened last week, closing at its highest level in three weeks against the US dollar. The currency appreciated around 1% during the week, marking its strongest weekly performance since March.

The rupee's gains were supported by a decline in crude oil prices and the dollar index, which fell to its lowest level in nearly 15 weeks.

State-owned banks sold dollars on behalf of the Reserve Bank of India (RBI), further contributing to the rupee's appreciation. The RBI's net short dollar position narrowed to $103.33 billion at the end of June from $106.66 billion at the end of May.

Dilip Parmar, senior research analyst at HDFC Securities, attributed the rupee's strength to a softer greenback and lower oil prices, as well as capital inflows from foreign investors and a broader risk-on rally.