Business
Rupee Rises Against Dollar as Hormuz Trade Route Concerns Ease
The Indian rupee appreciated by 5 paise in early trade on Friday as investor sentiment improved following reports that the United States and Iran had agreed to extend their ceasefire arrangement for another 60 days, easing concerns over global energy supplies and trade routes.
The Indian rupee strengthened by 5 paise against the US dollar in early trading on Friday, supported by improved global sentiment after reports that the United States and Iran had agreed to extend their ceasefire arrangement for an additional 60 days.
Forex market participants said the development has reduced concerns over disruptions in global energy supplies and maritime trade, particularly through the strategically important Strait of Hormuz.
At the interbank foreign exchange market, the rupee opened at 95.77 against the US dollar before gaining further ground to reach 95.53 in early trade. During the initial trading session, the domestic currency also touched an intraday level of 95.78 against the American currency.
According to currency traders, the ceasefire extension is expected to support uninterrupted trade flows through the Strait of Hormuz while diplomatic negotiations continue regarding Iran’s nuclear programme.
The easing of geopolitical tensions in West Asia has contributed to improved investor confidence, leading to a positive impact on emerging market currencies, including the rupee.
Market experts noted that movements in crude oil prices, foreign institutional investment flows, US dollar strength, and global geopolitical developments will continue to influence the rupee’s trajectory in the coming days.
India, as a major importer of crude oil, closely monitors developments in the Gulf region because disruptions in shipping routes can directly affect energy prices, inflation, and currency markets.