Rupee Strengthens To 95.53 Against U.S. Dollar In Early Trade

The Indian rupee appreciated by 5 paise against the U.S. dollar in early trade on Friday, supported by softer crude oil prices and improved global risk sentiment following reports of a temporary extension of the U.S.-Iran ceasefire arrangement.

At the interbank foreign exchange market, the rupee opened at 95.77 per dollar before strengthening to 95.53 during early trade. The domestic currency had settled at 95.58 against the U.S. dollar in the previous session on Wednesday. Indian financial markets remained closed on Thursday on account of Eid-ul-Azha.

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Ceasefire Extension Eases Market Concerns

Investor sentiment improved after reports indicated that U.S. and Iranian negotiators had reached a tentative understanding to extend the ceasefire in the ongoing conflict by another 60 days.

The proposed arrangement is expected to help maintain shipping movement through the Strait of Hormuz, one of the world’s key oil transit routes, while discussions continue over Iran’s nuclear programme.

The easing of immediate supply concerns led to a decline in crude oil prices, offering relief to oil-importing countries, including India.

Brent crude futures, the global oil benchmark, declined 1.12% to $92.66 per barrel in futures trade. Oil prices had surged sharply in recent weeks due to tensions in West Asia and fears of disruptions in energy supply routes.

Dollar Index Holds Firm

The dollar index, which tracks the U.S. dollar against a basket of six major currencies, traded at 99.09, up 0.07% in early Asian trade.

Despite the marginal rise in the dollar index, the rupee found support from lower crude prices and relatively stable market sentiment across emerging economies.

Forex market participants are also closely monitoring capital flows and expectations around the Reserve Bank of India’s upcoming monetary policy meeting scheduled between June 3 and June 5.

Foreign Fund Outflows Remain A Concern

Foreign institutional investor activity continued to weigh on sentiment. According to exchange data, foreign institutional investors sold Indian equities worth ₹1,042.70 crore on a net basis on Wednesday.

Market data showed that overseas investors have pulled out nearly $24 billion from Indian equity markets since the beginning of 2026, while debt markets have recorded inflows of around $1 billion during the same period.
Currency dealers said persistent foreign fund outflows remain one of the key challenges for the rupee despite recent stability in crude oil prices.

The Reserve Bank of India has already undertaken liquidity and forex management measures to reduce volatility in the currency market. Investors are expected to watch the upcoming RBI policy meeting for any signals related to inflation, liquidity management and interest rate direction.

The rupee’s movement in the near term is likely to remain linked to crude oil prices, global risk appetite and foreign portfolio investment trends.