Crude oil falls, FIIs come to India: How did the position of the rupee rise against the dollar?

The rupee has appreciated significantly against the dollar in the last few days. The main reasons are considered to be withdrawal of foreign investors in India and fall in crude oil prices. According to the Global Trade Research Initiative (GTRI), external pressures on India are easing. Falling crude oil prices have reduced the country’s import bill, and foreign investors have returned to the Indian stock market after withdrawing in October. These changes have supported the rupee. The think tank estimates that if this positive trend continues, the rupee may stabilize at ₹9293 per dollar in the next few months.

Foreign Portfolio Investors (FPIs) invested in Indian stocks between November 2 and 9 at Rs. 53,739 crore net purchases, while in October they had Rs. 34,843 crore net sales. The change comes with a 24 percent drop in Brent crude prices. Its price was $118 per barrel on October 30, which fell to $90 per barrel on November 10. Due to these conditions, the pressure on the rupee is decreasing. On the one hand, the number of dollars India needs to import energy has decreased. On the other hand, foreign capital is returning to domestic financial markets.

Rupee improved

On November 11, the rupee strengthened against the US dollar to Rs. was 93.65. This is the highest level in six months, and it was up 0.3% on the day. Compared to March 2026 Rs. Can be done with a level of 9798. This decline in crude oil prices is due to changes in geopolitical risks. The US And Israel’s political developments have reduced the immediate risks of military tensions involving Iran.

Relief in crude oil too

For India, which is largely dependent on imports for its crude oil needs, this drop in prices has brought more relief than just lower fuel costs. A reduction in the oil import bill will mean the country needs fewer dollars to buy energy, which could reduce pressure on the local currency (rupee). Improving energy supply can also provide another relief. Supply problems will be reduced by improving the supply of crude oil, liquefied petroleum gas (LPG) and liquefied natural gas (LNG) from the Red Sea through the Strait of Hormuz and Bab al-Mandeb. This will also reduce the risk of sudden spikes in energy prices again.

Withdrawal of foreign investors

Another major reason for the relief is the return of foreign capital into the Indian stock market. FPIs, who were net sellers in October, reversed their stance in the first nine days of November and a total of Rs. 53,739 crore worth of shares bought. The change comes after a massive selloff in US technology and artificial intelligence stocks on Nov. 5, which knocked about $2.5 trillion off the Nasdaq market value. Due to this turmoil, some global institutional investors may have reconsidered their investments in US technology stocks and diverted some of their capital to other markets, including India.

This fresh buying by foreign investors has helped stem the decline in Indian equities and supported dollar inflows into the domestic market. It is not entirely clear to what extent the sell-off in US technology stocks prompted investors to shift to Indian stocks.

Rupee may rise further

Lower crude oil prices and rising foreign investment inflows into portfolios are both improving the near-term outlook for the rupee. These two things work in different ways. Cheap crude oil reduces India’s demand for dollars, while foreign investment increases the supply of dollars in the domestic market. GTRI estimates that the rupee will depreciate to Rs. 9293 per dollar level, but this is possible only if the current trend continues. If tensions with Iran flare up again, crude oil prices go back up or foreign investor sentiment changes again, the rupee’s rally could be affected. India’s currency and stock markets have found some relief due to easing pressure on crude oil and return of foreign investors.