Rupee Rises 27 Paise to 84.96 Amid Foreign Inflows, Strong Economic Data

Mumbai, April 29:The Indian rupee appreciated by 27 paise to settle at 84.96 against the US dollar in early trade on Tuesday, buoyed by strong foreign institutional inflows, improved domestic economic indicators, and easing global trade tensions.

At the interbank foreign exchange, the rupee opened at 85.06 and later strengthened to touch 84.96 against the greenback, marking a notable gain from its previous close of 85.23. During the session, it also saw a brief dip to an early low of 85.15.

Forex traders attributed the rupee's strength to positive sentiment in domestic equities and data showing a 3% growth in both manufacturing and industrial production, reflecting robust domestic demand. On Monday, the rupee had already appreciated by 18 paise.

“Supportive macroeconomic signals, combined with China's recent de-escalatory stance on trade tariffs and a more diplomatic global tone, have created a favorable environment for the rupee,” said Amit Pabari, Managing Director at CR Forex Advisors.

Pabari noted that China's move to exempt certain goods from tariffs and reduce duties on automobiles is seen as a step toward reducing global trade tensions and avoiding a full-scale trade war.

On the global front, US Treasury Secretary Scott Bessent stated that negotiations with key Asian allies, including India and Japan, are showing progress, which has contributed to a calmer forex environment.

However, experts warned that any spike in geopolitical tensions, particularly between India and Pakistan, could swiftly reverse gains and put downward pressure on the rupee.

Meanwhile, the dollar index, which measures the greenback's strength against six major currencies, was trading higher by 0.17% at 99.18. Brent crude, the global oil benchmark, dipped by 0.68% to USD 65.41 per barrel in futures trade, offering further support to the rupee by easing import costs.

In domestic markets, bullish sentiment continued as the BSE Sensex surged 404 points or 0.50% to 80,622.37, while the NSE Nifty rose 115.40 points or 0.47% to 24,443.90. Foreign institutional investors (FIIs) were net buyers, pumping in ₹2,474.10 crore into equities on Monday, according to exchange data.

Though industrial production growth moderated from 5.5% year-on-year to 3% in March due to weaker performance in the manufacturing, mining, and power sectors, overall indicators remain positive for economic momentum.