Mumbai, May 5, 2025 – The Indian rupee strengthened significantly, gaining 24 paise to close at 84.33 (provisional) against the US dollar, driven by a sharp drop in crude oil prices and robust foreign institutional investor (FII) inflows. The domestic currency’s rally, which saw it touch an intra-day high of 84.10, was further supported by positive momentum in Indian equities, with the BSE Sensex rising 294.85 points to 80,796.84 and the Nifty climbing 114.45 points to 24,461.15.

FIIs injected ₹2,769.81 crore into Indian equities on Friday, signaling sustained foreign interest, while Brent crude fell 1.26% to $60.52 per barrel, easing India’s import burden. “The over 20% year-to-date decline in oil prices has bolstered the rupee’s fundamentals,” said Jateen Trivedi, VP Research Analyst at LKP Securities, predicting a trading range of 84.00–84.75. However, forex traders cautioned that global uncertainties, including geopolitical tensions, could limit further gains. The dollar index, down 0.38% at 99.64, also aided the rupee’s ascent.

India’s forex reserves, which rose by $1.983 billion to $688.129 billion for the week ended April 25, reflect economic resilience, marking eight weeks of consecutive growth. “This buffer strengthens our currency’s stability,” noted economist Anjali Sharma. Despite Friday’s volatility, when the rupee hit a seven-month high but closed 3 paise lower at 84.57, Monday’s performance underscores optimism. Still, traders remain vigilant as global commodity trends and risk sentiment could sway volatility.

For Indian consumers, the rupee’s strength offers relief by potentially lowering fuel and import costs. As markets navigate a complex global landscape, the currency’s upward trajectory signals confidence in India’s economic outlook, though sustained gains hinge on stable external factors.