The rupee began the day 21 paise higher at 93.17 against the US dollar on Wednesday, 15 April, supported by declining oil prices and a boost in risk appetite amid optimism that US-Iran peace talks will resume. The rupee closed at 93.3750 on Monday, 13 April. The Indian stock market was closed on Tuesday.
Brent crude for June delivery fell to $94.40 a barrel during Asian trading, continuing a 4.6% decrease from the previous day, as hopes grew for the resumption of peace discussions between the United States and Iran. The contract had jumped to around $104 on Monday after negotiations failed over the weekend.
Negotiations aimed at ending the conflict may resume in Pakistan within the next couple of days, stated US President Donald Trump on Tuesday, following the collapse of discussions that led to Washington implementing a blockade on Iranian ports.
This renewed diplomatic effort has raised hope that the conflict can be resolved, possibly reinstating the interrupted flow of crude oil and fuel.
However, experts believe that the recent surge in crude oil prices is becoming a growing concern for India, given the country’s heavy dependence on oil imports. Higher oil prices tend to widen the trade deficit, stoke inflation, and put pressure on the .
The situation is further complicated, as noted by the experts, by sustained foreign investor outflows, with pulling out around ₹48,213 crore ($5.14 billion) from Indian equities in the first 10 days of April, following a massive ₹1.17 lakh crore ($12.7 billion) withdrawal in March. When rising oil prices coincide with dollar outflows, the pressure on the rupee intensifies.
Experts also note that the challenge is global rather than India-specific. According to the International Monetary Fund, if remain near $100 per barrel, global growth could slow to around 2.5%, and in a severe escalation scenario, it may drop to nearly 2%, raising the risk of a global recession while also reigniting inflationary pressures.
However, there are some positive signals, including potential diplomatic talks and a weaker dollar, which could offer limited support to emerging market currencies, according to experts.
Rupee outlook
According to Amit Pabari, MD, Research Team, CR Forex Advisors, with NOP-related flows now behind us and global uncertainties rising, the room for further rupee appreciation appears limited. USD/INR is likely to find a base in the 92.20–92.50 range, with a gradual move towards 93.50–94.00 levels.
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