On Tuesday, the Indian Rupee (INR) experienced a slight decline against the US Dollar (USD). Despite this setback, there are indications that the INR could recover, driven by anticipated foreign fund inflows, as the Indian stock market is expected to follow the upward trajectory of its Asian counterparts in response to record gains on Wall Street.
Analysts suggest that the USD/INR exchange rate may weaken further, fueled by decreasing oil prices. As the world’s third-largest oil importer, India is significantly impacted by fluctuations in oil costs, which form a major component of its import expenses. Recent reports have suggested that Israel is likely to avoid strikes on Iranian oil facilities, alleviating fears of potential supply disruptions and contributing to the downward trend in crude oil prices.
On Monday, the Indian Rupee faced additional pressure due to a significant sell-off by foreign institutional investors, who sold a net total of 37.32 billion rupees (approximately $444 million) in stocks. This marked the eleventh consecutive session of net selling by these investors. In contrast, domestic investors were active buyers, net purchasing shares worth 22.78 billion rupees, as reported by Reuters.
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