Mild relief for Indian rupee likely on oil rally halt, slightly improved risk tone to aid

MUMBAI: The Indian rupee is likely to see mild relief at open on Tuesday, helped by oil’s rally halting, while ​a slightly improved risk tone lent further support to the ‌under-pressure currency.

The 1-month non-deliverable forward indicated the rupee will open in the 92.35-92.40 range versus the US dollar, having settled at 92.42 on Monday.

Brent crude fell nearly ​3% on Monday, while US equities rallied, the dollar weakened, ​and Treasury yields slipped, marking a reversal of the price ⁠action seen since the outbreak of the Iran war.

The pullback in ​oil came amid some ships making the transit through the Strait of Hormuz ​and on rising expectations of further strategic stockpile releases by IEA member nations.

However, the relief appeared fragile, with oil prices in the Asian session largely recovering from Monday’s drop. ​

Brent crude futures were last quoted at $103.04.

US allies rebuffed calls to send ​warships to help tankers move through the Strait of Hormuz, drawing criticism from US ‌President ⁠Donald Trump.

“The prospect of de-escalation remains unclear amid mixed signals from both the US and Iran,” Morgan Stanley said in a daily note to its clients.

US equity futures declined in Asian trade, while Indian equities ​were set for ​a slightly softer ⁠open after Monday’s relief rally. Foreign investors continued to pull money out of India despite the recovery, with ​outflows hitting nearly $1 billion on Monday.

Oil risks building

Higher-for-longer ​oil prices ⁠remain a major headwind for the rupee, with India importing nearly 90% of its crude requirements, increasing pressure on the trade balance and inflation.

Some ⁠banks have ​raised their longer-term oil price forecasts, with ​Bank of America lifting its 2026 Brent projection to $77.50 a barrel from $61 and Standard Chartered ​raising its estimate to $85.50 from $70.