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India's Rupee Gains Ground as Oil Prices Fall, Central Bank Signals Support

India's rupee strengthened against major currencies this week as crude oil prices declined amid diplomatic developments in the Middle East. The Reserve Bank of India's Governor indicated the rupee may be undervalued, signaling potential support for the currency. The central bank has already moved to defend the rupee through market interventions as elevated energy costs had pushed it to record lows. Policymakers are weighing additional measures including potential interest rate adjustments to stabilize the currency. The RBI is expected to transfer a record surplus of nearly 3 trillion rupees to the government, providing New Delhi a financial cushion as geopolitical tensions continue to pressure energy markets. The rupee's near-term direction will hinge on global oil price movements and the central bank's ongoing policy stance, analysts say.