The Indian rupee strengthened by 48 paise to close at 94.95 against the US dollar on Tuesday, marking a notable gain driven by positive market sentiment following Saudi Arabia's decision to slash crude oil prices for Asia.
Rupee Gains on Crude Price Cut
Forex traders said market sentiment was buoyed after Saudi Arabia reduced August crude oil prices for Asia by USD 11 per barrel, easing concerns about inflation and trade deficits. The rupee opened stronger at 95.10 and touched an intraday high of 94.90 before settling at 94.95, compared to the previous close of 95.43.
Impact of Lower Oil Prices
The reduction in crude prices is expected to lower India's import bill and support the rupee. India is one of the world's largest oil importers, and cheaper crude helps narrow the trade gap. Analysts noted that the move also signals Saudi Arabia's effort to stabilize global oil markets amid demand concerns.
Market Reaction
Domestic equity markets also traded higher, with the BSE Sensex rising over 300 points, reflecting improved risk appetite. The dollar index eased slightly, further aiding the rupee's recovery. Traders are now watching for further cues from the RBI and global oil price movements.
