Rupee strengthens 28 paise as easing West Asia tensions lift sentiment

The rupee appreciated by 28 paise against the US dollar in early trade on Monday, buoyed by a sharp decline in crude oil prices and improving global risk sentiment after signs of easing tensions between the United States and Iran.

The domestic currency opened at 96.18 against the US dollar in the interbank foreign exchange market before giving up some gains to trade at 96.25 in early deals. It had settled at 96.53 on Friday after recovering 20 paise from its intraday lows.

Currency dealers said lower crude oil prices, a softer US dollar and gains in domestic equities provided support to the rupee, even as foreign institutional investors continued to remain net sellers.

The US dollar index, which measures the greenback against a basket of six major currencies, fell 0.26 per cent to 101.04.

Brent crude, the international benchmark, dropped more than 4 per cent to trade at USD 92.74 a barrel in futures trading after indications that geopolitical tensions in West Asia could be easing.

Market sentiment improved after the United States and Iran signalled a pause in hostilities. US Ambassador to the United Nations Mike Waltz said President Donald Trump was allowing diplomatic efforts to continue, adding that negotiations involving Oman, Iran and other stakeholders had intensified in recent weeks.

Domestic equity markets also opened firmly higher. The BSE Sensex advanced 613.80 points, or 0.81 per cent, to 76,673.57, while the NSE Nifty rose 165.40 points, or 0.70 per cent, to 23,931.55.

Despite the positive start to the week, foreign institutional investors remained net sellers, offloading equities worth Rs 3,892.77 crore on Friday, according to exchange data.

With PTI inputs