Rupee Opens Stronger Below 95 Per Dollar as Softer Crude Prices Support Currency

The Indian rupee opened 46 paise higher against the U.S. dollar on August 5, starting the session at 94.92 per dollar compared with its previous close of 95.38. The domestic currency advanced after easing global crude price levels reduced pressure on India’s import bill, while the U.S. dollar remained near a multi-week low.

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The rupee’s move below the 95 mark comes ahead of the Reserve Bank of India’s monetary policy announcement, which is expected to remain a key driver for currency markets during the week.

Crude Oil and RBI Policy in Focus

Speaking to Moneycontrol, Jateen Trivedi, Vice President, Research Analyst – Commodity and Currency at LKP Securities, said the rupee is expected to take cues from movements in the crude price, the U.S. Dollar Index, foreign institutional investor (FII) flows and geopolitical developments.

He added that the RBI’s policy decision and its forward guidance will be closely monitored for indications on the currency’s near-term direction. According to Trivedi, the rupee is likely to trade within the 95.00-95.75 range over the short term.

The crude price remains an important factor for the Indian currency because the country imports a significant portion of its energy requirements. Lower international oil prices generally reduce import costs and can provide support to the rupee.

Asian Currencies Trade Higher

Most Asian currencies also strengthened against the U.S. dollar during early trade.

The South Korean won posted the biggest gain, rising 0.34%. It was followed by the Philippine peso, which advanced 0.31%, while the Taiwan dollar added 0.21%. The Malaysian ringgit gained 0.17%, the Japanese yen rose 0.13%, and the Chinese renminbi edged up 0.09%. The Singapore dollar remained largely stable with a marginal gain of 0.02%.

Among regional currencies, the Indonesian rupiah was the weakest performer, declining 0.17%, while the Thai baht was almost unchanged, slipping 0.003% from its previous close.

Dollar Index Near Six-Week Low

The U.S. Dollar Index, which measures the greenback against six major currencies, remained close to a six-week low. The index was last quoted at 99.85, showing little change after falling earlier in the week.

The softer dollar followed renewed optimism surrounding developments in the Middle East, reducing demand for the U.S. currency as a safe-haven asset.

For the domestic foreign exchange market, investors will continue to track the RBI’s policy announcement, overseas capital flows, global geopolitical developments and the direction of the crude price. These factors are expected to influence trading in the rupee over the coming sessions as markets assess both domestic and international macroeconomic developments.