The rupee was buoyed on Monday, touching a five-week high, as the US and Iran reached an agreement to end the West Asia conflict, leading to crude oil prices sinking to three-month lows.
The Indian currency closed stronger at 94.71 per US Dollar, up 40 paise against the previous close of 94.11. In intraday trades, the Rupee hit a five-week high of 94.4625.
The rupee gained 65 paise last Friday to close at 94.11 per dollar, a one-week high.
Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities, said: “We believe this marks the beginning of a more durable recovery rather than a one-off bounce. Two powerful tailwinds are now converging.
First, the government and the RBI have delivered what is effectively a bazooka on the capital-flows front.”
He emphasised that the measures announced earlier this month are sweeping — full tax exemption for foreign investors on government bond interest and capital gains, the Fully Accessible Route opened up to long-tenor 15-, 30- and 40-year bonds and green bonds, equity access widened to a broader class of non-resident individuals; and, crucially, the RBI bearing the entire hedging cost on fresh three-to-five-year FCNR(B) deposits until the 30th of September.
Banerjee said the move on FCNR(B) deposits allows banks to offer NRIs close to 7% on dollar deposits with no exchange-rate risk, and the September deadline creates a strong incentive to bring those dollars in quickly.
The market is estimating these measures could draw inflows of anywhere between $40 and $55 billion.
“Second, the oil equation is now turning in India’s favour. If the Hormuz agreement holds — and this morning’s developments suggest it will — and Brent moves down towards $70–73, that materially eases our import bill and current account, which only amplifies the inflow story.
“Alongside this, we expect flows into the equity segment to improve as global risk sentiment recovers. Taken together, this is a decisively positive setup for the rupee,” he said.
Banerjee assessed that over the next one to two weeks, the Rupee is expected to strengthen towards 94, and a decisive break of that level would open the door to 93, and potentially 92.5, over the following 2-3 months. For now, 94 is the key level to watch, and below that, 93.
Published on June 15, 2026
