The Indian rupee closed stronger on Monday after weakening of the US Dollar Index and Brent crude.
The local currency strengthened by 10 paise to close at Rs 83.37 against the US dollar, after opening at Rs 83.40. It closed at Rs 83.47 in comparison with the US dollar on Friday, according to Bloomberg data.
The rupee encountered challenges due to a lack of substantial dollar inflows, coupled with a rise in the dollar index amid ongoing conflict between Israel and Iran, according to Amit Pabari, managing director at CR Forex. "This underscores the vulnerability of the rupee."
"If the given geopolitical risk subsides, one can expect a reversal or correction in oil, gold, and the US dollar index. However, India's strong economic fundamentals and its high foreign exchange reserves act as a safety net, enabling the RBI to counter downward pressure on the rupee," Pabari said.
"The hawkish comments from Fed officials in recent weeks have lifted the USD. A cooling in Middle east tensions helped temper volatility as of now but investors will still remain cautious. For USDINR, 83.30 acts as a support, while 83.55 a resistance," Kunal Sodhani, vice president of Shinhan Bank, said.
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