Lower oil prices and progress on Strait of Hormuz navigation support the Indian Rupee amid reduced energy supply risks.
The Indian Rupee (INR) traded nearly flat against the US Dollar (USD) on Thursday, with the USD/INR pair hovering around 95.12. The currency rebounded from a monthly low of 94.83, supported by declining oil prices and easing tensions in the Strait of Hormuz, a key chokepoint for global energy supplies.
Oil prices remained subdued, with the MCX Crude Oil contract near Rs. 7,125, close to its three-week low of Rs. 7,078. Iran and Oman are nearing an agreement to manage navigation through the Strait of Hormuz, though progress depends on Washington lifting its naval blockade on Iranian ports. Meanwhile, Houthi attacks on Saudi tankers in the Red Sea continue to pose supply risks.
Market sentiment remains cautious as geopolitical developments unfold, with a 50% chance of a Hormuz agreement by Friday, according to a Gulf official.