During early trading sessions, the rupee demonstrated a rise of 31 points, reaching the level of 95.12 against the US dollar. Previously, on the interbank foreign exchange market, the rupee opened at 95.15 against the dollar and then rose to 95.12, which is 31 points higher than the previous close.
This 31-point rise of the rupee to 95.12 at the start of Monday's trading was driven by a sharp decline in global crude oil prices and the weakening of the dollar after US President Donald Trump decided to postpone strikes against Iran.
According to currency market traders, the strengthening of the local currency was also supported by the inflow of funds from FII, an increase in the country's foreign exchange reserves, and support from the Reserve Bank of India (RBI).
Earlier, on Friday, the rupee was in positive territory for the fifth consecutive day, gaining 7 points and closing trading at 95.43 against the US dollar.
On Sunday, US President Donald Trump stated that he had decided to refrain from ordering American forces to conduct new strikes against Iran at the insistence of Gulf allies—Qatar, Saudi Arabia, and the United Arab Emirates.
The President added that the plan involved American forces carrying out 'the largest strike since World War II' on Sunday. However, he decided to cancel this plan and allow more time for diplomacy after receiving information from key Gulf leaders, including Saudi Crown Prince Mohammed bin Salman, as well as at the request of unnamed Iranian officials.
Anil Kumar Bhansali, head of treasury and executive director of Finrex Treasury Advisors LLP, noted that 'the rupee was supported by lower Brent crude prices, a weaker dollar, and steady portfolio investment inflows, as well as the consistent presence of the RBI in the currency market on Friday.'
He also reported that 'since Brent crude prices fell to $84 per barrel after Trump postponed strikes against Iran, the rupee opened at 95.15 on Monday and is expected to trade in the range of 95.00-95.50.'
The Dollar Index, which reflects the strength of the greenback against a basket of six currencies, traded 0.17 percent lower at 99.74.
Brent crude futures, the global oil benchmark, traded 5 percent lower, at $83.66 per barrel.
In the domestic stock market, the Sensex index rose by 470.06 points, reaching 78,564.70 at the start of trading, while the Nifty increased by 150 points to 24,532.95.
According to exchange data, foreign institutional investors purchased shares on a net basis worth 277.48 crore rupees on Friday.
RBI data published on Friday showed that the country's foreign exchange reserves grew by $6.118 billion, reaching $682.354 billion for the week ending July 24. In the previous reporting week, total reserves increased by $1.08 billion, reaching $676.237 billion.
Furthermore, according to data provided by the Comptroller and Auditor General (CGA) on Friday, the central government's fiscal deficit was 18.2 percent of the target for the full year as of the end of June.
