New Delhi: The Indian rupee posted a strong gain on Monday, surging 58 paise to 94.60 against the US dollar in early trade after news broke that the United
States and Iran had finalised a peace agreement to end their 107-day war and reopen the Strait of Hormuz, the critical waterway through which roughly one-fifth of global oil supplies pass. The rupee had opened at 94.70 before strengthening further, building on Friday’s 67-paise gain to 95.18.
US President Donald Trump announced the deal on Truth Social on Sunday evening, saying the formal signing would take place on June 19. “The Deal with the Islamic Republic of Iran is now complete. Congratulations to all,” Trump said, adding that it would reopen the Strait of Hormuz and end the US naval blockade on Iranian ports.
Markets react with relief
The announcement triggered an immediate and broad-based market rally. Brent crude plunged 4.66% to $83.26 per barrel in futures trade, while the dollar index slipped 0.22% to 99.53. On the domestic equity front, the Sensex surged 1,112.70 points to 76,648.74 and the Nifty jumped 335.55 points to 23,956.40 in early trade, reflecting the scale of relief felt across financial markets.
According to PTI, VK Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, said that the rupee’s direction today would be heavily shaped by the peace deal and the resulting crash in crude prices. “This means India’s balance of payments problem for FY27 is no longer a serious issue,” he said. He added that the rupee, which had touched a low of 96.96 to the dollar on May 20, was likely to trade in the 94.80 to 94.60 range with further appreciation possible in coming days.
Forex reserves and FII activity
India’s forex reserves fell $711 million to $681.610 billion during the week ended June 5 due to a decline in foreign currency assets, the RBI said on Friday. Foreign institutional investors offloaded equities worth Rs 1,082.18 crore on a net basis on Friday, according to exchange data.
