Indian Currency vs US Dollar: In light of rising tensions between the US, Israel, and Iran, the US administration has granted a temporary 30-day waiver to allow Indian refineries to purchase Russian oil.

Dollar vs Rupee: The Indian rupee once again saw a rise on the last trading day of the week. On Friday, the rupee strengthened by two paise to reach 91.62 against the US dollar. The rupee received support from the US, which granted a 30-day waiver to Indian refineries to purchase Russian oil amid the ongoing war in West Asia. Forex traders say that despite the US currency's decline, the negative trend in domestic stock markets and foreign fund outflows limited the rupee's gains.

In light of rising tensions between the US, Israel, and Iran, the US administration has granted a temporary 30-day waiver to allow Indian refineries to purchase Russian oil. According to foreign exchange analysts, the Reserve Bank of India (RBI) also intervened to protect the local currency from the uncertainties and extreme volatility caused by the ongoing war between the US, Israel, and Iran. However, the strengthening of the dollar, rising crude oil prices, and heavy withdrawals by foreign institutional investors have continued to put pressure on the rupee.

Why the Rupee's Strength?

The rupee opened stronger in the interbank foreign exchange market than its previous close of 91.64 and was trading at 91.62, up two paise against the dollar. After falling 97 paise in the previous two sessions, the Indian rupee recovered 41 paise to close at 91.64 per dollar on Thursday. Meanwhile, the dollar index, which gauges the dollar's position against six major currencies, fell 0.37 percent to 98.94. Meanwhile, Brent crude futures, the global oil benchmark, fell 1.05 percent to $84.51 per barrel.

What do experts say?

According to Samir Karyat, Executive Director and Head of Trading at DBS Bank India, geopolitical tensions in West Asia have significantly impacted the Indian rupee. Concerns about crude oil supply and rising prices have put pressure on the rupee's exchange rate.

He added that in the current uncertain environment, investors have shifted toward safe assets, further increasing the pressure on the rupee. Consequently, the rupee has declined by approximately 1.4 percent this week.