Rupee Rises Against Dollar On Robust GDP Growth, FPI Inflows & RBI Support

Mumbai: The Indian rupee strengthened by 28 paise to close at a nearly two-month high of 94.94 (provisional) against the US dollar on Tuesday, supported by robust domestic economic growth, controlled fiscal slippage and portfolio-related inflows.

Forex traders said recent MSCI-linked inflows have provided temporary support to the domestic currency. They also suggested that possible intervention by the Reserve Bank of India (RBI) may have helped strengthen the rupee.

The rupee opened at 95.06 in the interbank foreign exchange market and moved between an intraday high of 94.79 and a low of 95.10. It finally settled at 94.94, gaining 28 paise from its previous close.

On Monday, the rupee had closed 21 paise higher at 95.22 against the US dollar.

Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the rupee gained due to possible RBI intervention and positive macroeconomic indicators.

However, weak domestic equity markets and a rise in crude oil prices restricted sharper gains, he added.

The dollar index, which measures the strength of the US currency against six major currencies, was trading at 99.58, up 0.15 per cent.

Meanwhile, Brent crude, the global oil benchmark, rose 1.97 per cent to USD 92.27 per barrel in futures trade.

Choudhary said the rupee could face pressure due to increasing crude oil prices amid renewed geopolitical tensions between the US and Iran.

He added that hawkish comments from US Federal Reserve officials could also impact the currency.

However, any easing of geopolitical tensions may provide support to the rupee. The USD-INR spot price is expected to remain in the range of 94.65 to 95.25.

In the domestic equity market, the Sensex declined 12.99 points to close at 76,944.28, while the Nifty fell 24.60 points to settle at 24,055.80.

Foreign institutional investors (FIIs) sold equities worth Rs 7,985.88 crore on a net basis on Monday, according to exchange data.

Despite this, foreign investors invested around USD 3.1 billion in Indian markets in August, their strongest monthly inflow in 23 months and the second consecutive month of net buying.

However, FIIs remain net sellers of around USD 24.6 billion so far in 2026.

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India’s economy grew by 7.8 per cent in the April-June quarter, beating expectations and showing resilience amid global economic uncertainties.

Meanwhile, the central government’s fiscal deficit for 2026-27 stood at 26.8 per cent of the full-year target at the end of July, according to data released by the Controller General of Accounts (CGA).

The figure was lower compared to 29.9 per cent of the Budget Estimates recorded during the first four months of the previous financial year.

(Except for the headline, this article has not been edited by FPJ's editorial team and is auto-generated from an agency feed.)

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