Rupee rallies, premiums and volatility expectations fall after Iran ceasefire; RBI eyed - Reuters

<a href="https://news.google.com/rss/articles/CBMiuAFBVV95cUxNM0VPYnVqUnJBZHNtVVJJRG9adWdLaWw5SmtYMVdid1E4cDJUb3NLTEpGM3pxazl1UHZTNTZrbFI3U0RkNk5nUVZCNVk4N3BPNVlubGltMzZBODBCOTRtUk85S3p4OVdxcXdNN0FheWNPa3c0b19HT3lCcnpYaDdEcTNTQndPTmFvdDVNQy1teDlNM3NmNlFWa1NPbElnNnp2R2JJUGpfeTBEQ0UxVDB5dGtLZUhkMWdM?oc=5" target="_blank">Rupee rallies, premiums and volatility expectations fall after Iran ceasefire; RBI eyed</a>&nbsp;&nbsp;<font color="#6f6f6f">Reuters</font>

The Indian rupee is set to strengthen following a two-week ceasefire between Iran and the US, which has led to a significant drop in oil prices and improved risk sentiment across Asian markets. The Reserve Bank of India is expected to maintain current interest rates amid these developments.

Government bond yields softened following reports of a phased ceasefire agreement between the US and Iran, which lifted market sentiment and eased crude oil prices. However, the rupee gave up most of its gains by the close due to importer demand and geopolitical caution.

The Indian rupee is set to open higher, buoyed by plunging oil prices and a rally in Asian currencies following a two-week Middle East ceasefire. Investors are also focused on the Reserve Bank of India's policy decision later in the day.

The benchmark government bond yield in India fell by 9 basis points after the US and Iran weighed a framework proposal to end their five-week conflict, lifting market sentiment and easing crude oil prices. The rupee also strengthened against the dollar but gave up most gains by the close.

The rupee recovered some ground against the dollar, supported by aggressive Reserve Bank of India intervention in the foreign exchange market through dollar sales. The central bank stepped in across both the non-deliverable forwards and the spot market to ease the depreciation pressure that had intensified after the currency breached the 89.50-per-dollar level on Friday, leading to a potential fall to 90 per dollar.