Mumbai: The Indian rupee opened stronger against the US dollar on Thursday, rising by 13 paise to 87.80 amid renewed optimism over a potential US-India trade agreement. Forex traders attributed the rally to a combination of foreign fund inflows, positive trends in domestic equities, and a risk-on market sentiment.
In the interbank foreign exchange market, the rupee opened at 87.80 against the dollar, marking a gain of 13 paise from the previous close. On Monday, the currency had strengthened by 9 paise to 87.93. The forex market remained closed on Tuesday and Wednesday due to Diwali and Balipratipada holidays.
The rally comes after US President Donald Trump indicated that India could face slower oil purchases from Russia, which fueled optimism about a trade deal between the two countries. The market expects that such an agreement could reduce tariffs on Indian exports to the US from the current 50 percent to 16 percent, according to Anil Kumar Bansali, Head of Treasury and Executive Director at Finrex Treasury Advisers LLP.
The upbeat sentiment follows recent efforts by both nations to strengthen bilateral ties, including a telephone conversation between Prime Minister Narendra Modi and President Trump, during which trade issues were discussed. Trump described the US-India relationship as “great” and hinted at ongoing work on “major deals” without providing specifics.
Market participants continue to monitor global cues, US economic data, and RBI monetary signals for further direction, Bansali noted. Trump also reiterated that India had agreed to curb Russian oil imports, stating that by the end of the year such purchases would “virtually cease,” though he acknowledged the process would take some time.
Meanwhile, the US dollar index, which tracks the greenback against a basket of six currencies, rose 0.15 percent to 99.04. Brent crude futures, a global oil benchmark, surged 2.64 percent to $64.24 per barrel.
Domestic equity markets opened higher, with the BSE Sensex gaining 734.36 points to 85,160.70 and the Nifty 50 rising 198.3 points to 26,066.90. Exchange data showed that foreign institutional investors purchased equities worth ₹96.72 crore on Tuesday.
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