Indian Rupee gains 1.5% as RBI hints at undervaluation and oil prices ease amid geopolitical hopes.
The Indian Rupee strengthened to the mid-95.00 range from near 97.00, marking a 1.5% appreciation. Easing West Asia tensions, lower oil prices, and central bank support drove the move, alongside expectations of monetary tightening.
RBI Governor Malhotra’s comments on rupee undervaluation signaled a shift from the bank’s traditional stance. Record dividend payouts to the FY27 budget and limited fiscal slippage risks further bolstered confidence. Inflation concerns, including a 7% rise in pump prices over two weeks, may delay near-term rate hikes.
Markets interpreted the RBI’s stance as supportive, though policy tightening could be deferred until the second half of the calendar year.