Rupee Gains 21 Paise To 90.44, Supported By India-US Trade Pact Clarity

Mumbai: The Indian rupee rose 21 paise to 90.44 against the US dollar in early trade on Monday. The currency gained strength after positive sentiment emerged following the India-US interim trade framework announcement.

The rupee opened weaker at 90.66 per dollar but quickly recovered. It moved higher as investors reacted positively to trade deal developments and improving global market signals.

Trade deal and global factors support currency

Forex traders said the India-US trade framework has improved confidence in India’s external trade outlook. The agreement includes lower import duties on several goods to increase trade between both countries.

The US plans to cut tariffs on Indian goods to around 18% from 50%. India is expected to reduce or remove duties on several US industrial, food and agricultural products. These include animal feed inputs, fruits, soybean oil, and some processed food items.

India has also expressed plans to buy US energy products, aircraft parts, precious metals and technology products worth about USD 500 billion over the next five years.

A weaker dollar index and positive domestic stock markets also helped the rupee strengthen. The dollar index was down 0.05% at 97.58. Brent crude prices also eased nearly 1% to around USD 67.41 per barrel, which supports India as it imports large quantities of oil.

RBI monitoring currency movement

Market experts said the Reserve Bank of India continues to manage currency volatility. The central bank is believed to sell dollars when the rupee weakens sharply and buy dollars when the rupee strengthens too fast.

According to treasury experts, RBI was seen buying dollars near the 90.05 level to prevent excessive strengthening after the trade deal announcement.

Domestic markets and forex reserves add strength

Indian equity markets also supported the rupee. Sensex and Nifty traded higher in early trade, supported by strong foreign investment flows.

Foreign investors bought equities worth around ₹1,951 crore recently, adding support to the rupee.

India’s forex reserves also reached a record high of USD 723.77 billion for the week ended January 30. In the previous week, reserves had increased to USD 709.41 billion, crossing the earlier peak of September 2024.

Strong reserves provide a safety cushion against global currency volatility.