Rupee Surges on Oil Price Plunge

The Indian rupee experienced a notable appreciation on Monday, marking its third consecutive session of gains against the US dollar. It closed at 95.23, its highest level in over two weeks. This upward movement coincided with a substantial drop in global crude oil prices, which decreased by over 5% to $97.8 per barrel.

Reserve Bank of India Governor Sanjay Malhotra commented on the currency's performance, stating that while the central bank does not target specific exchange rate levels, it is prepared to intervene against excessive volatility. He suggested that the recent depreciation might have made the rupee undervalued, assuring that the RBI would ensure orderly price discovery in the forex market.

Market participants are anticipating potential measures from the RBI at its upcoming policy meeting on June 5th to further support the rupee. These could include concessional FCNR deposits or easing borrowing norms for foreign investors. Despite these potential interventions, some analysts predict a continued weaker path for the rupee in the coming weeks, albeit at a slower pace.