Indian economists expect the rupee to strengthen against the dollar over the next couple of months as crude oil slides to two-month lows and foreign investors return, though the Reserve Bank of India may limit how far it rises.
MoneyTurkey Currencies Desk | 10 November 2026
Key points
- The rupee last closed at 93.9275 per dollar on Monday, after touching a six-month high of 93.69; Indian currency markets were shut on Tuesday for a holiday and reopen on Wednesday.
- Brent briefly fell below $90 a barrel on Tuesday for the first time since Aug. 31 before paring losses to trade near $91.70, with US crude near $86.20.
- Economists Santosh Mehrotra and Devendra Pant say cheaper oil, a softer dollar and returning portfolio flows should support the currency.
What happened
Oil fell to two-month lows on Tuesday after US Secretary of State Marco Rubio told Group of Seven allies that sanctions and the naval blockade are working well enough that President Donald Trump does not need major combat operations in Iran. Trump said on Monday he would hold off on new strikes for now after appeals from countries in the region, including Qatar.
Brent dropped as low as about $89.15 in the morning, CNBC reported, then recovered part of the fall after Iran’s top security official said no talks were under way with Washington. By the New York afternoon Brent was near $91.70 and West Texas Intermediate near $86.20, Reuters figures carried by The Globe and Mail showed.
The rupee could not react on home markets: Indian foreign exchange trading was closed on Tuesday. On Monday it hit 93.69 per dollar, its strongest in about six months, but closed slightly weaker at 93.9275 as state-run banks bought dollars, ending a six-session winning streak, Reuters reported.
What economists say
“Overall, we can expect the Indian rupee to appreciate further over the coming couple of months,” Santosh Mehrotra, a former UN adviser, told the ANI news agency. He pointed to the Democrats’ win in both houses of the US Congress weakening the dollar, a possible easing of Middle East risk and the return of foreign buyers to Indian shares. India imports about 90% of its crude oil, so cheaper oil cuts its import bill.
Devendra Pant, chief economist at India Ratings and Research, said lower crude, possibly lower freight rates and RBI steps to improve dollar supply, including selling dollars directly to oil marketing companies, could help steady the rupee. He declined to name a level: “The outlook is, you can say cautious optimism, and the rupee is likely to strengthen further.”
The limits
Emkay Global’s Madhavi Arora told Reuters she expects the RBI to use any lasting improvement in inflows to rebuild its foreign exchange reserves rather than let the rupee rise sharply. The central bank’s net short dollar position in the forward market reached a record of nearly $240 billion in September, leaving it with large future dollar commitments.
Hotter-than-expected US consumer prices for October also made a half-point Federal Reserve rate rise in December more likely, investors told Reuters, which could support the dollar.
Why it matters
India buys most of its oil abroad, so the crude price feeds straight into its trade gap, inflation and the rupee. A lasting drop in oil would ease pressure on the currency, while Pant warned that any new flare-up in the Gulf could reverse the gains.
What to watch
- How the rupee trades when Indian markets reopen on Wednesday, after the US inflation figures
- Whether oil holds near two-month lows or rebounds on Iran headlines
- State-run bank dollar buying that traders link to the RBI
- Foreign portfolio flows into Indian shares and bonds
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For information only. Not investment advice.
Sources
- The Economic Times (ANI): Easing global headwinds, lower crude oil prices may further lift rupee in coming months: Economists
- ETCFO (Reuters): Indian rupee breaks six-day winning streak on state banks’ dollar bids
- EBC Financial Group: USD/INR closes at 93.93 as dollar buying halts rupee rally
- The Korea Times (Reuters): Oil prices hit 2-month lows as US downplays further Iran strikes
- The Globe and Mail (Reuters): Oil prices ease to two-month lows as U.S. downplays further Iran strikes
- CNBC: Brent crude dips below $90 for first time since August on Iran hopes
- EnergyNow: Oil prices fall again as Trump signals restraint on Iran
