A third consecutive session of declining oil prices boosts the Indian Rupee by reducing import costs and foreign outflows.
The Indian Rupee (INR) strengthened for a third straight trading day, with the USD/INR pair falling to near 95.65. The decline in oil prices, which dropped 1.4% to Rs. 7,848 on the MCX Crude Oil contract, has supported the currency by lowering India’s import bill.
India imports 85% of its energy needs, making it highly sensitive to oil price fluctuations. The recent drop in crude prices follows easing US-Iran tensions after President Trump indicated negotiations were underway, reducing supply disruption fears. However, the Strait of Hormuz remains closed, keeping energy markets volatile.
Markets now await the Federal Reserve’s policy decision on Wednesday, with traders pricing a 62% chance of unchanged interest rates.