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

Mumbai: The Indian rupee surged by 28 paise to record a two-month high of 94.94 against the US dollar on Tuesday, buoyed by strong domestic economic growth, limited fiscal overspending, and inflows from portfolio investments. Forex traders noted the recent MSCI-linked inflows provided temporary relief to the domestic currency. They also hinted at potential assistance from the Reserve Bank of India (RBI) in strengthening the rupee.

The rupee opened at 95.06 in the interbank foreign exchange market, fluctuating between a high of 94.79 and a low of 95.10 before closing at 94.94, marking a 28-paise increase from its last trade. On Monday, the rupee ended 21 paise higher at 95.22 per US dollar. RBI Support, Growth Data Boost Rupee Anuj Choudhary, a Research Analyst at Mirae Asset Sharekhan, credited the rupee's rise to possible RBI intervention and favorable macroeconomic data.

However, he noted that weak domestic stock markets and a spike in crude oil prices limited the currency's gains further. The dollar index, which tracks the US dollar's strength against six major currencies, stood at 99.58, up 0.15 percent. Brent crude, the global oil benchmark, also climbed 1.97 percent to $92.27 per barrel in futures trading.

Global Factors May Limit Gains Choudhary warned that rising crude oil prices due to renewed US-Iran tensions and hawkish remarks from US Federal Reserve officials could exert downward pressure on the rupee. However, any easing of global tensions might provide support to the currency. The USD-INR spot price is anticipated to hover between 94.65 and 95.25.

Sensex, Nifty Extend Decline for Two Consecutive Sessions, Banking, Auto, and Real Estate Stocks Weigh on Markets Markets remain under pressure in the domestic equity market, with the Sensex slipping 12.99 points to 76,944.28, and the Nifty dropping 24.60 points to 24,055.80. Foreign Institutional Investors (FIIs) sold equities by a net Rs 7,985.88 crore on Monday, according to exchange data.

Despite this, FIIs injected around $3.1 billion into Indian markets in August, marking their strongest monthly inflow in 23 months and the second consecutive month of net buying. Nevertheless, FIIs continue to be net sellers by around $24.6 billion so far in 2026.