Overview
- Both currencies made small gains on Friday with the Indian rupee settling at 95.38 per dollar and the Pakistani rupee at 278.05, reflecting market moves on July 10.
- Traders and analysts cited a weaker US dollar, easing Brent and WTI futures and stronger domestic equity flows as the main drivers of the recoveries.
- India’s foreign exchange reserves rose by USD 7.26 billion to USD 674.193 billion in the week to July 3, providing a larger buffer for the rupee.
- Market participants flagged the risk of Reserve Bank of India intervention to smooth sharp moves and said upcoming US economic data will influence Fed expectations and dollar direction.
- Because both countries import most of their oil, changes in crude prices and renewed tensions in West Asia could quickly reverse sentiment and affect import bills, capital flows and currency stability.