Rupee hits five-week high after oil plunges; traders eye further rally

The Indian rupee strengthened 0.4% to close at 94.71 against the US dollar, touching an intra-day high of 94.4625 — its strongest level in five weeks. The rally was driven by a more than 5% plunge in Brent crude to around $83/barrel, which is positive for India given its ~90% oil import dependency, along with expected dollar inflows from the RBI's recent measures. Economists have upgraded India's balance of payments outlook to a small surplus, though the RBI may use rupee strength to pare its record $104 billion short dollar forward book.