FX.co ★ Indian Rupee Extends Stronger Momentum

The Indian rupee appreciated to 85.6 per USD, drawing close to the three-month peak of 85.3 observed on April 3rd, as widespread dollar weakness interrupted large banks' earlier trend of selling the rupee within permitted limits. This strengthening was further bolstered by restrained outflows as augmented oil production from OPEC+ countries and concerns about economic growth in the United States applied pressures on crude oil and fuel prices, key components of Indian imports. These factors effectively counterbalanced the Reserve Bank of India's inclination towards reducing interest rates. Recent statistics indicated that Indian inflation rates hit their lowest point in over five years in March, markedly below the central bank's target midpoint of 4%. Moreover, India's GDP expanded by 6.5% in the past financial year, down from the 8.2% growth rate during the previous period, prompting the central bank to address these growth-related issues.