Mumbai, May 2 (PTI)) The rupee appreciated 77 paise to 83.77 against the US dollar in early trade on Friday, supported by sustained foreign fund inflows and stronger domestic data.
Forex traders said GST collections for April were robust at Rs 2.37 lakh crore, an all-time high, reflecting the health of domestic demand. Moreover, a positive trend in domestic equities driven by foreign fund inflows further boosted sentiments.
However, caution lingers, as they noted any escalation in tensions between India and Pakistan could swiftly reverse gains and pressurise the rupee, much like past geopolitical episodes.
At the interbank foreign exchange, the domestic unit opened at 83.98 against the greenback, then gained ground and touched 83.77, registering a gain of 77 paise over its previous close.
On Wednesday, the rupee surged 42 paise to 84.54 against the US dollar.
The forex market was closed on Thursday on account of 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.
“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,” CR Forex Advisors MD Amit Pabari said.
On the domestic macroeconomic front, Goods and Services Tax (GST) collection rose 12.6 per cent Y-o-Y to an all-time high of about Rs 2.37 lakh crore in April, which the government said shows the resilience of the Indian economy and the effectiveness of cooperative federalism.
The gross GST mop-up was Rs 2.10 lakh crore in April 2024 — the second-highest collection ever since GST was rolled out on July 1, 2017. The net mop-up was Rs 1.92 lakh crore.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.27 per cent at 99.97.
Brent crude, the global oil benchmark, rose 0.55 per cent to USD 62.45 per barrel in futures trade.
In the domestic equity market, the 30-share BSE Sensex advanced 722.82 points or 0.90 per cent to 80,965.06, while the Nifty rose 203.70 points or 0.84 per cent to 24,537.90.
Foreign institutional investors (FIIs) bought equities worth Rs 50.57 crore on a net basis on Wednesday, according to exchange data.
