Mumbai, Jun 2 (PTI) The rupee appreciated by 12 paise to 85.43 against the US dollar in early trade on Monday on the back of a weak American currency and favourable macroeconomic data that fuelled hope of a further reduction in key interest rate in the RBI’s upcoming monetary policy.
However, a volatile equity market, outflow of foreign funds and higher crude oil prices amid global trade related uncertainties weighed on the Indian currency, according to forex traders.
Analysts also said that market participants will be closely monitoring key macroeconomic announcements for further cues.
RBI’s Monetary Policy Committee (MPC) will begin the deliberations on its next bi-monthly policy on June 4 and the outcome is scheduled to be announced on June 6.
Besides, PMI (Purchasing Managers’ Index) data for manufacturing and services sectors is also expected to be announced this week.
At the interbank foreign exchange, the domestic unit opened at 85.55 and gained further ground to trade at 85.43 against the greenback in initial deals, registering a rise of 12 paise from its previous close.
The rupee ended 7 paise lower at 85.55 against the dollar on Friday.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.05 per cent at 99.21.
Brent crude, the global oil benchmark, rose 2.12 per cent to USD 64.11 per barrel in futures trade.
In the domestic equity market, the 30-share BSE Sensex tumbled 709.10 points, or 0.87 per cent, to 80,741.91, while the Nifty dropped 196.00 points or 0.79 per cent to 24,554.70.
Foreign institutional investors (FIIs) sold equities worth Rs 6,449.74 crore on a net basis on Friday, according to exchange data.
According to the latest govern data released on Friday, the Indian economy expanded at a faster pace than expected in the last quarter of the 2024-25 fiscal. The GDP growth rate of 7.4 per cent in January-March period of FY25 reflected a strong cyclical rebound that was helped by a rise in private consumption and robust growth in construction and manufacturing.
The government also managed to meet its fiscal deficit target of 4.8 per cent of the GDP for 2024-25, according to the provisional data released by the Controller General of Accounts on Friday.
The country’s gross GST collection remained above the Rs 2 lakh crore mark for the second month in a row, rising 16.4 per cent in May to over Rs 2.01 lakh crore. Goods and Services Tax (GST) collection had touched a record high of Rs 2.37 lakh crore in April.
The Reserve Bank’s weekly data released on Friday showed India’s forex reserves jumped by USD 6.992 billion to USD 692.721 billion during the week ended May 23. The reserve had dropped by USD 4.888 billion to USD 685.729 billion in the preceding week.
