Rupee opens flat at 95.13 against US dollar | Stock Market News

The Indian rupee opened flat at 95.13 against the US dollar on Thursday, 6 August, supported by broad-based weakness in the greenback amid easing expectations of a US Federal Reserve rate hike next month and Brent crude holding near its recent lows.

The domestic currency extended its recovery after breaching the 95-per-dollar mark for the first time in a month on Wednesday, although gains were capped by dollar demand from importers and intraday speculative buying.

The rupee briefly weakened to around 95.25 during the previous session before recovering, as volatility in crude oil prices continued to influence sentiment. The currency has now rebounded nearly 1.7% from its recent lows.

According to a Reuters report, a currency trader said Wednesday's trading session remained broadly supportive for the rupee, helping maintain a positive underlying bias despite intermittent demand for the US dollar from corporates and traders.

The Reserve Bank of India (RBI) struck a measured tone in its August monetary policy, choosing to keep interest rates unchanged while signalling that it would wait for greater clarity on inflation before considering any policy action.

According to RBI Governor Sanjay Malhotra, the central bank has revised its FY27 inflation forecast down to 5.0% from 5.1%, while core inflation has been lowered more sharply to 4.3% from 4.7%. At the same time, the RBI marginally raised its GDP growth projection to 6.7% from 6.6%, reflecting confidence in the resilience of the domestic economy despite an uncertain global backdrop.

India's external sector continues to provide support to the rupee. The country's foreign exchange reserves have climbed to nearly a three-month high of $692.9 billion, sufficient to cover more than ten months of imports. Meanwhile, foreign investors turned net buyers of Indian equities in July, investing $2.12 billion, marking the first monthly inflow in five months.

Despite the comfortable reserve position, some risks persist. The RBI's net forward dollar commitments have crossed $100 billion, which could limit the central bank's flexibility to intervene aggressively during periods of heightened volatility.

Domestic economic indicators also point to a moderation in growth. India's HSBC Composite PMI eased to 54.3 in July, its lowest reading since March 2022, indicating that while economic activity continues to expand, the pace of growth has softened.

Globally, signs of slowing momentum are also emerging. In the United States, private sector employment increased by just 44,000 jobs in July, the weakest monthly gain in six months, reinforcing expectations that the world's largest economy is gradually cooling.

According to market experts, crude oil prices continue to be the most important near-term driver for the rupee. Brent crude has declined more than 8% over the past two sessions as hopes of diplomatic progress involving Iran and Oman raised expectations of smoother shipping through the Strait of Hormuz, easing concerns over global supply disruptions.

However, analysts caution that geopolitical risks remain elevated. While diplomatic efforts have gathered pace, Iran-backed Houthi attacks on Saudi oil tankers and renewed statements from Iran's Revolutionary Guard on its nuclear programme highlight the fragile nature of the situation.

Experts believe the rupee's near-term direction will largely depend on whether easing oil prices are sustained or geopolitical tensions once again disrupt energy markets.

According to Amit Pabari, MD, Research Team, CR Forex Advisors, for now, the rupee finds itself caught between encouraging diplomatic headlines and lingering geopolitical risks. Positive developments around Hormuz could help it revisit the 94.80–95.00 zone, while any disappointment may see USD/INR drift back towards 95.80–96.20.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

Dhanya Nagasundaram works as a Content Producer at LiveMint, specializing in news related to financial markets, stocks, and business. With over eight years of experience in journalism and content creation, she has honed her skills in data-driven reporting and market analysis. Her focus is on monitoring stock trends, initial public offerings (IPOs), corporate news, policy shifts, and larger economic trends that affect investors and market players. <br><br> At LiveMint, Dhanya consistently writes and produces articles that make complex financial topics accessible to readers. She keeps a close eye on equity markets, commodities, and macroeconomic indicators, assisting audiences in comprehending how global and domestic events influence investment perspectives. Her stories frequently underscore emerging trends within sectors, the IPO market, company earnings results, and market strategies pertinent to both retail and institutional investors. <br><br> Before her tenure at LiveMint, Dhanya accumulated a wealth of professional experience at various companies, including MintGenie, Informist, Cogenics, Chary Publications, KPMG, and the Royal Bank of Scotland. These positions allowed her to establish a solid foundation in financial research, reporting, and content creation. <br><br> Throughout her career, she has explored numerous subjects such as trading strategies, commodities, IPOs, wealth generation, corporate profits, and macroeconomic indicators. Her background in both financial journalism and corporate settings has given her the ability to tackle stories with analytical rigor while ensuring clarity for her audience. Through her contributions, Dhanya strives to deliver insightful, trustworthy, and investor-centric financial content.

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