The rupee gained 39 paise to 70.30 paise against the US dollar in early trade on Monday between plunging crude oil prices. Weakness in the American currency and a positive opening of domestic equity markets lifted the rupee, traders were stated as saying in the PTI report. On Thursday, the rupee had closed at 70.69 after gaining 77 paise against the dollar. On Friday, the forex market was closed on account of Gurunanak Jayanti.
Experts attribute the gains in the rupee to easing crude oil prices, growth in foreign currency reserves, and inflow of foreign funds. “The easing of crude oil prices along with the appreciation in the rupee is a positive from the external sector front as well (from) inflation and hence, monetary policy (front),” Care Ratings stated in a report.
The rupee could outperform its emerging market peers unless crude prices threaten to reverse, said IFA Global. “The OPEC (Organization of the Petroleum Exporting Countries) meet on 6th December will be critical. It will be interesting to see if Saudi Arabia pushes for a cut given that the US has leverage over it in the Jamal Khashoggi murder case,” the IFA Global Research Desk said in a note.
Oil prices clawed back some losses after a nearly 8 percent plunge in the previous session but remained under pressure with Brent crude below $60 per barrel amid weak fundamentals and struggling financial markets, reported news agency Reuters. Front-month Brent crude oil futures rose 91 cents, or 1.6 percent, to $59.71 per barrel by 0520 GMT or 10:50 am IST, reported news agency Reuters. US West Texas Intermediate (WTI) crude futures, were up 49 cents, or 1 percent, at $50.91 per barrel.