GST news India: The rupee has its biggest one-day gain in a month, snapping back to 86 level, tariff hopes rupee by domestic factors. Indian rupee up 40 paise to end at 86.95 on Tuesday, as compared to 87.35 in the previous session, settled higher on Monday.
Rupee vs dollar race has gained ground on hopes that the U.S. could soften its stance on additional 25% tariffs following talks between Donald Trump, Vladimir Putin and Volodymyr Zelenskiy over ending the war in Ukraine, increasing the possibility of a peace deal that will also lower chances of new sanctions on India’s oil imports from Russia.
Domestically, the consumption-led recovery and optimism over the government’s plan to lower the goods and services tax GST impact on rupee reform in eight years supported the rupee. Traders said the easing of the GST rates will add to growth momentum in the near term and boost sentiment and attract back foreign portfolio flows, which have turned negative recently.
Besides, the local currency also gained support from an upgrade in the credit rating outlook for India, which has already raised hopes and confidence about the economy.
Jateen Trivedi, Vice President (Research) at LKP Securities, said that FII selling pressure has lessened further and a positive backdrop from India-Japan ties ahead of the Prime Minister’s visit to Tokyo later this month has improved market sentiment. “The rupee dollar exchange rate could continue to trade in a range of 86.60-87.25,” he added.
“Indian rupee outperformed Asian currencies on risk-on move supported by growth-oriented reforms, fresh buying of funds and a technical correction. We expect spot USDINR rate to find support at 86.80 and resistances near 87.20 in near-term,” said Dilip Parmar, Assistant Vice President – Forex and Derivatives, HDFC Securities, in a report.
