FX.co ★ Indian Rupee Strengthens to 4-Month High

In April, the Indian rupee appreciated to 85 per USD, marking its strongest level in four months. This increase was driven by a weakening US dollar and a surge in Indian asset values. India's limited reliance on exports provides a buffer against recession fears linked to a US trade war. Furthermore, the rupee found support from restricted capital outflows, as increased oil output from OPEC+ countries and economic growth concerns in the US exerted downward pressure on crude oil and fuel prices—key components of Indian imports. These factors helped mitigate the anticipated reduction in interest rates by the Reserve Bank of India. Recent data indicated that the Indian inflation rate dropped to its lowest point in over five years as of March, significantly under the RBI's target midpoint of 4%. Additionally, the Indian economy grew by 6.5% during the last fiscal year, compared to 8.2% in the previous period, prompting the central bank to prioritize economic growth.