Crashing crude oil helps rupee gain 220 paise in 7 days; 3 major triggers

The continuous crash of international crude oil prices and foreign capital inflows have helped India rupee stand stronger against the US dollar over the past few weeks.

Brent crude slipped by 6 per cent to the lowest since December 2017. (Image: AFP)

Rupee vs Dollar: The continuous crash of international crude oil prices and foreign capital inflows have helped India rupee stand stronger against the US dollar over the past few weeks. According to the market reports, the Indian currency continued its winning streak for a seventh consecutive day to hit a two-month high of 71.11 against the US dollar and is set for the longest winning run in more than a year. This is the highest value of rupee since September to bag the badge of the biggest gainer among all Asian countries. On Thursday, the Indian currency strengthened by 35 paise to inch closer to 70-mark while bond prices climbed over 8 basis points. Various traders also believe that dollar’s weakness against some currencies overseas and increased selling of the greenback by exporters and banks also supported the rupee. They also stated that the fresh foreign fund inflows and a steep fall of nearly 7 per cent in global crude prices to a one-year low on Tuesday buoyed rupee sentiments. In the last six trading sessions, the domestic unit has gained 143 paise. 3 key triggers for strengthening of Indian currency against the US dollar: 1. First and the foremost factor that boosts rupee is the outcome of the recent Reserve Bank of India’s board meeting which posted an end to over the rift between government and RBI over policy decisions. The Central bank, during the meeting, also agreed to constitute a panel to study the demand for sharing its central reserves. 2. A report by news agency Reuters stated that the Brent crude slipped by 6 per cent to the lowest since December 2017. Year to date, Crude oil is down 5.49 per cent which is a 26.8 per cent all from its 2018 peak of $86.29 per barrel seen on 3 Oct, the report added. The rupee had hit a record low during this time. 3. According to analysts, another big catalyst for India rupee is the ongoing state elections. The outcome of the polls will affect the market significantly. The results of as many as 5 state elections are scheduled to take place on December 11. Stock market roundup: The BSE Sensex ended lower for the third straight session on Thursday by falling over 218.78 points, or 0.62 per cent at 34,981.02. The NSE Nifty shed 73.30 points, or 0.69 per cent, to close at 10,526.75.