On Thursday, the Indian Rupee appreciated as positive news on a trade deal with the US offset concerns about higher crude oil prices. According to Bloomberg data, the rupee gained eight paise to close at 88.85 against the dollar on the day, although it has depreciated 2.61% so far this year. The rupee depreciated 4.36% against the dollar during Samvat 2081, hitting record lows amid sustained foreign outflows.
Reports indicate that India and the US may agree to a trade deal soon, reducing tariff rates on Indian goods to 15-16% from the current 50%. Separately, crude oil prices rose to two-week highs as geopolitical concerns intensified and US sanctions were imposed on oil companies. Brent crude rose 5.38% to $65.96 per barrel and WTI increased 5.59% to $61.77 per barrel.
The Reserve Bank of India has not purchased dollars for the second month in a row after selling $7.6 billion in August. The rupee’s real effective exchange rate (REER) declined to 97.6 in September from 98.8 in August, reflecting lower competitiveness.
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