On Monday, the Indian Rupee broke a three-day hangar and this time the currency rose as the declining prices of crude oil provided the currency with a strong support. The Rupee ended up 10 paisis stronger at 88.64 versus US dollar, which is a slight recovery following days of assault. Market reports indicate that the currency has been increasing by 0.10 percent this month, which is yet to be increased by 3.53 percent this year, making it one of the worst-performing currencies in Asia in 2025.
The appreciation in the Rupee is at a time when India has made its first structured deal to import liquefied petroleum gas (LPG) in the United States. Oil marketing companies that are state-owned have signed a one-year contract to import about 2.2 million tonnes per annum (MTPA) of LPG to be used in the 2026 contract. Analysts reckon that this arrangement would stabilise the long-term energy prices and up to a volatility in the import bill in India, which would in turn help support the Rupee in the months to come.
In the meantime, the US dollar index was slightly higher at 99.39 and it increased by 0.1 per cent as the world markets awaited a set of delayed US economic data releases- delayed earlier by a government shutdown. The expectation of these numbers has had traders guarded which has restricted a drastic move in the currency.
Prices of crude oil in the international commodities fell amid new concerns about the supply situations. The US crude oil inventories have increased two weeks in a row raising the fear of over supply. Brent crude fell by 0.57 per cent to a low of 64.02 per barrel and WTI abandoned by 0.63 per cent to 59.70 per barrel at 3.30 PM IST. The decreased oil prices usually lead to less pressure on the Rupee which is also one of the major factors that led to the currency performance on Monday.
In general, according to market observers, the short-term direction of the Rupee will be determined by the global energy patterns, the US economic indicators, and the internal macroeconomic factors.
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