Indian rupee poised for subdued start as traders watch oil prices, IPO-linked flows

According to Business Recorder, the Indian rupee is likely to open quietly on Monday, with dealers focused on crude prices and foreign portfolio movements for direction. The currency is seen opening between 95.90 and 95.95 per US dollar, slightly weaker than Friday's close of 95.8725. Market participants are also counting on the central bank to limit further depreciation.

Oil slipped on Monday but stayed above $100 a barrel, as Iran and the United States traded fresh threats and investors weighed the return of energy cargoes from Saudi Arabia. Brent was 2% lower at $101.7 a barrel. Hopes of a diplomatic route to end the Iran war, ahead of a UN meeting this week, also helped ease prices.

Goldman Sachs said in a note that stronger capital flows should keep USD/INR within a 95 to 97 range, although elevated oil prices may pressure the current account. Foreign exchange reserves have risen to about $781 billion following measures the central bank introduced to attract capital, which gave it room to fund the current account gap. Separately, the National Stock Exchange of India's $2.3 billion public offering was fully subscribed on Friday, and analysts expect strong demand from overseas institutions to continue on Monday.