The Indian rupee recorded its biggest single-day gain in five years on Wednesday as it closed the trading day at 70.4462 versus the US dollar, a level not seen since September 2013. But the run of good fortune for the crisis-hit currency extended into today as it broke through the 70-barrier, appreciating in value to 69.9250. The rupee ended the trading day at 70.4025. The rise of the rupee comes after oil prices continued to be plagued by oversupply fears, while US dollar investors were on edge ahead of a Federal Reserve announcement on interest rates.
Oil stabilised on Wednesday after one of its biggest falls in years, but remained under pressure from oversupply and concern that a slowing global economy would depress demand.
Benchmark Brent crude oil was up 75 cents at $57.01 a barrel by 14:45 GMT, after dropping 5.6 percent on Tuesday and at one point hitting a 14-month low.
US light crude was 76 cents higher at $47.00, after plunging 7.3 percent in the previous session when it touched its lowest since August 2017.
Both benchmarks have fallen more than 30 percent since the beginning of October as crude supply from the Middle East, Russia and the United States has outstripped demand.
The Organization of the Petroleum Exporting Countries and other oil producers agreed this month to curb production by 1.2 million barrels per day, equivalent to more than 1 percent of global demand, in an attempt to drain tanks and boost prices.
But the cuts will not come into effect until next month and meanwhile production has been at or near record highs in the United States, Russia and Saudi Arabia.
At its lowest point this year, the crippled currency nosedived by as much as 14 percent versus USD.
October saw INR crash through the 74-barrier and reached an all-time low of 74.39 against the US dollar.
The rupee is forecast by Fitch Ratings to weaken to 75 by the end of 2019 on a widening current account deficit and tighter global financing conditions.
Fitch said: “The widening of the current account deficit amidst tighter global financing conditions should put downward pressure on the currency, and we forecast the INR to weaken to 75 against the dollar by end-2019.”
Higher interest rates and rising import prices are also expected from the depreciating rupee, according to Fitch.