Overview
- The rupee rose to 96.30 per US dollar on Friday, July 17, after the dollar index fell to a one-month low when U.S. inflation came in softer than expected, reducing near-term Fed rate-hike odds.
- Domestic market support helped the move, with India’s benchmark indexes jumping sharply and traders saying equity gains lifted demand for the rupee.
- Reports of likely intervention by the Reserve Bank of India and a weekly increase in forex reserves of about USD 964 million to USD 675.157 billion provided a policy buffer against sharp swings.
- Escalating US–Iran hostilities pushed Brent crude toward the mid-$80s per barrel, which kept investor caution high and capped how far the rupee could strengthen.
- Regional spillovers were modest as the Pakistani rupee logged a tiny gain to 277.96, and market-watchers will be watching oil, foreign fund flows, and any RBI action for the next directional move.