Rupee Rises as Oil Drops Ahead of RBI Meeting

The Indian rupee strengthened significantly against the US dollar on July 28, 2026, opening 15 paise higher at 95.76 and trading at 95.64 due to falling global crude oil prices and easing geopolitical tensions. This movement follows a strong 54 paise appreciation on July 27, marking its best session in six weeks with a total gain of approximately 70 paise. The Reserve Bank of India actively intervened in the spot market by selling dollars to prevent the currency from crossing the psychological threshold of 97 per dollar and to manage excessive volatility.

The currency's strength is closely linked to Brent crude oil prices falling to around $87 per barrel amid reports of diplomatic progress between the United States and Iran. Analysts attribute the recent surge in oil prices to maritime supply bottlenecks in the Strait of Hormuz, with expectations that prices will stabilize between $60 and $70 per barrel once normalization occurs. Additional support stems from a weakening US dollar index, down 0.06% at 101.31, alongside anticipated foreign currency inflows of about $32 billion from FCNR-B deposits.

Ahead of the Reserve Bank of India Monetary Policy Committee meeting in August, analysts largely expect the central bank to maintain its key interest rate at 5.25% through the rest of 2026. June inflation rose to 4.38%, but regulatory focus remains centered on controlling currency volatility rather than defending a rigid exchange rate level. Foreign Institutional Investors remained net sellers, offloading equities worth ₹1,688.23 crore on Monday.