The Indian rupee remains under pressure from geopolitical uncertainty even as domestic equities have shown resilience. Currency traders are closely tracking the US-Iran situation, crude oil movements and foreign institutional flows, all of which can influence demand for the dollar. Foreign institutional investors bought Indian equities worth around Rs. 922 crore on Monday, providing some support to market sentiment.
The currency outlook could improve if the US-Iran negotiations result in a sustained reduction in geopolitical risk. Conversely, an escalation could push energy prices higher and increase India’s import costs, putting additional pressure on the rupee. Investors will also watch the RBI’s policy meeting this week for signals on liquidity and interest rates.
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