The Indian rupee ended 2 paise higher at Rs 94.49 against the US dollar on Friday, extending its recent strength despite pressure from elevated crude oil prices and ongoing US-Iran tensions. 

The currency opened at Rs 94.53 and touched an intraday high of Rs 94.40 before settling at Rs 94.49. The rupee’s gains were supported mainly by strong foreign currency inflows and continued intervention by the Reserve Bank of India (RBI). 

The central bank has been actively selling dollars in the foreign exchange market to limit volatility and support the domestic currency. Reuters reported that the rupee gained around 0.9% during the week, its strongest weekly performance in five weeks.

A major source of dollar inflows has been the RBI’s special foreign exchange schemes. These measures attracted more than $136 billion in inflows between June and August, including substantial FCNR deposits. India’s forex reserves also climbed to a record $740.80 billion for the week ended August 28, giving the central bank a strong buffer to manage external shocks.

However, higher crude oil prices remain a key risk for the rupee. Brent crude was trading near $96-$97 a barrel as renewed US-Iran tensions raised concerns about supply disruptions. Higher oil prices can increase India’s import bill and demand for dollars, potentially limiting further gains in the rupee.

The rupee had opened at Rs 94.46 on Friday, three paise stronger than the previous close, before giving up some of its gains during the session. Analysts remain cautious around the Rs 95 level, with future movements likely to depend on crude prices, foreign fund flows, RBI intervention and upcoming US economic data.

At the end of trading on September 4, the rupee was at Rs 94.49 per US dollar, unchanged from Thursday’s closing level in some market reports due to differences between provisional and final reference rates.

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