Currency Market News: Rupee jumps 77 paise to 83.77 vs US dollar in early trade

Rupee appreciated by 77 paise to 83.77 against the US dollar in early trade on Friday, bolstered by sustained foreign fund inflows and positive domestic data.

Forex traders highlighted that the Goods and Services Tax (GST) collections for April were robust, reaching an all-time high of Rs 2.37 lakh crore, indicating strong domestic demand. A positive trend in domestic equities, fuelled by foreign fund inflows, also contributed to the bullish sentiment.

However, caution remains as traders noted that any escalation in tensions between India and Pakistan could reverse the rupee’s gains and put pressure on the currency, similar to past geopolitical episodes.

At the interbank foreign exchange, the domestic currency opened at 83.98 against the greenback but gained ground, reaching 83.77, marking a 77-paise gain over its previous close. On Wednesday, the rupee had surged by 42 paise to 84.54 against the dollar. The forex market was closed on Thursday for Maharashtra Day.

“The rupee’s 2 per cent rise in March marked its best performance since November 2018, aided by a weaker US dollar outlook. However, caution persists amid ongoing geopolitical risks — particularly tensions with Pakistan over Kashmir — which could spark rupee volatility,” said CR Forex Advisors MD Amit Pabari.

He added, “At the same time, the Dollar Index (DXY) has found support at 98 and may rebound toward 102 on the back of renewed trade optimism. A continued dollar rally could weigh on the rupee, limiting its recent gains and reintroducing near-term instability.”

On the domestic front, the government’s GST collection for April rose by 12.6 per cent year-on-year, reaching a record Rs 2.37 lakh crore. This reflects the resilience of the Indian economy and the success of cooperative federalism. The gross GST collection was Rs 2.10 lakh crore in April 2024, marking the second-highest collection since the introduction of GST in July 2017, with a net mop-up of Rs 1.92 lakh crore.

Meanwhile, the dollar index, which measures the strength of the greenback against six major currencies, was trading 0.27 per cent lower at 99.97. Brent crude, the global oil benchmark, rose by 0.55 per cent to USD 62.45 per barrel in futures trade.

Stock Market Summary:

Indian equities opened higher after a mid-week holiday, mirroring positive global cues and strong domestic macros. The BSE Sensex opened at 80,300, up by 57.95 points or 0.07 per cent from its previous close, while the NSE’s Nifty 50 opened 22.30 points or 0.09 per cent lower at 24,311.90 levels.

Foreign institutional investors (FIIs) bought equities worth Rs 50.57 crore on a net basis on Wednesday, according to exchange data.