The Indian rupee rose sharply by 40 paise to 85.05 against the US dollar in early Monday trading. This gain was driven by a weaker US dollar index and positive trends in domestic equity markets.
Forex traders also noted that foreign fund inflows and the Reserve Bank of India’s announcement of a record dividend payout to the government for fiscal year 2025 supported the rupee’s strength.
The rupee opened at 85.02 and briefly strengthened to 84.98 before settling at 85.05 in initial deals, marking a significant gain over the previous close. On Friday, the rupee had surged 50 paise to close at 85.45 against the dollar.
Analysts said the rupee’s steady rise reflects a global trend of selling the US dollar, along with rising yields on American long-term bonds amid ongoing global trade uncertainties. The dollar index, which measures the greenback’s strength against six major currencies, was down 0.34% at 98.67.
Meanwhile, Brent crude oil prices edged up 0.32% to $64.99 per barrel in futures trading.
Market participants are now awaiting key economic data releases this week, including industrial and manufacturing production figures for April and the first quarter GDP growth numbers. These reports are expected to provide deeper insights into India’s economic performance.
In summary, the rupee’s early gains were supported by a combination of a weaker US dollar, positive domestic market sentiment, foreign investment inflows, and RBI’s financial moves, while investors watch upcoming economic indicators closely.
