Rupee extends rally for third day, closes at 94.75 per dollar

The rupee extended its winning streak to a third consecutive session, closing at 94.75 against the US dollar as buoyant foreign portfolio investment into Indian equities provided sustained support to the domestic currency.

The continued appreciation reflects broader market optimism around India's economic prospects and equity valuations, which have continued to attract overseas fund managers despite a mixed global backdrop.

However, the pace of the rupee's gains has been constrained by headwinds including a recent rebound in international crude oil prices and heightened geopolitical tensions. Rising energy costs pose an inflationary risk for India's import-dependent economy and weigh on the currency's outlook.

Analysts note that the rupee's performance will likely remain caught between support from sustained foreign equity inflows and resistance from elevated oil prices and global risk sentiment in coming sessions. The currency's trajectory will depend on the relative strength of these competing factors in the near term.