The Indian rupee closed nearly unchanged on Tuesday, with the impact of lower crude oil prices balancing out weakness in Asian currencies and dollar demand from foreign banks. The rupee ended at 84.0375 against the US dollar, slightly lower than the previous session's close of 84.06. Despite hitting an all-time low of 84.0750 on Monday, mild dollar sales from state-run banks and limited speculative activity helped prevent further losses for the rupee, according to traders. While there was a possibility of the rupee appreciating to 84.20 in the near term, traders expressed confidence that the Reserve Bank of India (RBI) would intervene to prevent any significant surge that could trigger panic among importers. Global market trends also influenced the rupee's performance. Asian currencies experienced a decline of between 0.1 per cent and 0.7 per cent on the day, while the dollar index strengthened to 103.1, nearing its two-month high. Brent crude oil futures dropped five per cent to $73.5 per barrel due to reduced demand and reports of Israel's willingness to avoid striking Iranian oil targets. This news eased concerns about supply disruptions. ING Bank noted that declining oil prices may limit potential USD gains, with some positioning ahead of the upcoming US election. While the falling oil prices provided some relief to the rupee, portfolio investment flows were expected to be a more significant driver of the currency's near-term direction. Foreign investors have pulled out approximately $8 billion from Indian stocks this month, reversing the inflows of $11.1 billion seen in September. This outflow, coupled with the decline in Indian equity indices, further weighed on the rupee. Attribution: Reuters Subediting: Y.Yasser
