Rupee Rebounds Strongly, Surges 40 Paise to 95.2 Against US Dollar on Middle East Peace Optimism

India, May 25 : The Indian rupee opened the week on a firm note, appreciating 40 paise to trade at 95.20 against the US dollar in early Monday deals amid improving global sentiment and hopes of easing geopolitical tensions in the Middle East.

In the interbank foreign exchange market, the domestic unit opened at 95.36 before strengthening further during early trade. The rebound follows Friday’s sharp recovery, when the rupee advanced 75 paise to close at 95.60 against the American currency.

Market sentiment improved after reports suggested that Washington and Tehran have made significant progress toward a possible agreement aimed at reducing tensions that have persisted for nearly three months. The conflict had earlier weighed heavily on emerging market currencies, including the rupee.

According to treasury market experts, lower dollar demand due to a US market holiday also supported the local currency. However, traders remain cautious over month end dollar requirements and the Reserve Bank of India’s likely intervention to manage volatility.

Adding to optimism, discussions around a potential interim trade arrangement between India and the United States also lifted confidence in financial markets. US Secretary of State Marco Rubio indicated that both countries are moving closer to finalising a trade understanding following recent negotiations.

Meanwhile, the dollar index slipped 0.20% to 99.04, reflecting weakness in the greenback against major global currencies.

Crude oil prices also eased sharply, offering relief to import-dependent economies like India. Brent crude futures fell 5.43% to $97.92 per barrel, reducing concerns over inflationary pressure and import costs.

Positive global cues spilled over to domestic equities as well. The BSE Sensex surged 908.98 points to 76,317.85 in opening trade, while the NSE Nifty climbed 262.65 points to 23,977.70.