Rupee rises 7 paise to 84.22 against U.S. dollar in early trade

Rupee strengthens against the dollar on improved investor sentiment, boosted by equity market rally and capital inflows.

Rupee appreciated 7 paise to 84.22 against the U.S. dollar in morning trade on Tuesday (November 26, 2024), on a sharp rebound in domestic equities amid improved investor risk appetite.

Forex traders said the MSCI equity index rebalancing significantly boosted sentiment for Indian equity markets as foreign institutional investors broke a 40-session streak of net selling by purchasing ₹9,947 crores on Monday (Nov. 25), lending robust support to the rupee.

Moreover, the win by the incumbent government in Maharashtra, further fuelled investor confidence in economic stability, sparking a rally in equity markets.

At the interbank foreign exchange, the rupee opened at 84.27 and moved in a tight range and touched an early high of 84.22 against the greenback, registering a gain of 7 paise over its previous close.

On Monday (Nov. 25), the rupee appreciated 12 paise to close at 84.29 against U.S. dollar.

“While Donald Trump’s aggressive trade policies loom large, the rupee’s outlook remains cautiously optimistic. The Reserve Bank of India’s projection of a GDP growth rebound to 7.6% in Q3 has infused fresh confidence in India’s economic trajectory. Additionally, a surge in capital inflows is likely to provide robust support,” CR Forex Advisors MD Amit Pabari said.

Mr. Pabari further said that the RBI’s vigilant stance will be critical in managing volatility, with interventions likely at key levels to maintain stability.