The BRICS TimesThe Indian rupee is witnessing strong momentum for the second consecutive day after RBI’s intervention and renewed trade talks between India and the US. While Monday closed with a 10-paise rise, Tuesday saw a 12-paise jump. In just a few hours, the currency gained 22 paise against the US dollar.
RBI’s Intervention Pushes Rupee Higher
After ending higher on Monday, the rupee opened strongly on Tuesday morning as well. This uptrend did not occur by chance. Experts highlight the Reserve Bank of India’s significant role. The central bank increased its presence in the offshore non-deliverable forward (NDF) market to reduce volatility. This step has directly supported the rupee’s recovery and given investors more confidence in the currency.
Trade Talks Spark Investor Optimism
Fresh signs of renewed trade negotiations between India and the United States have boosted market sentiment. Investors expect smoother trade relations and a reduction in the 50 percent tariff imposed on Indian exports. This hope is strengthening the rupee despite selling pressure from foreign investors and higher crude oil prices. Analysts caution that these factors could continue to weigh on the currency.
Rupee’s Strong Morning Rally
In early trade on Tuesday, the rupee climbed 12 paise to 88.04 against the US dollar. Investors awaited signals from the trade talks in New Delhi, where US negotiator Brendan Lynch was scheduled to meet Indian officials. Foreign exchange traders mentioned that inconsistent capital inflows and tariff measures from US President Donald Trump have kept pressure on the rupee. Yet, RBI’s increased action in the NDF market helped limit volatility and lifted the currency.
How Much Did the Rupee Gain?
In the interbank foreign exchange market, the rupee opened at 88.05 per dollar and later touched 88.04. This showed a gain of 12 paise compared to the previous closing. During early deals, the currency also tested 88.16 levels. On Monday, the rupee had already risen by 10 paise to 88.16. Altogether, the currency added nearly 22 paise within hours, and analysts believe it could dip below 88 in the coming days.
Trade Talks Could Steer Rupee’s Path
Amit Pabari, MD of CR Forex Advisors, stated, “This week, the rupee will depend on the India-US trade talks in New Delhi.” He added that real progress in the dialogue could “open the door for a major breakthrough” and give the rupee long-awaited support, especially when India’s infrastructure appears strong. Experts also believe RBI’s consistent efforts may further stabilize the currency in the coming sessions.
Dollar, Crude Oil, and Equity Market Updates
The US dollar index, which tracks the greenback against six major currencies, slipped 0.08 percent to 97.22. Meanwhile, global benchmark Brent crude futures rose 0.25 percent to trade at $67.61 per barrel. In domestic markets, the Sensex advanced 201.69 points to 81,987.43, while Nifty climbed 52.8 points to 25,122 in early trading. However, exchange data showed foreign institutional investors sold equities worth ₹1,268.59 crore on Monday, creating additional pressure on the rupee.
India-US Trade Dialogue to Resume
US chief negotiator Brendan Lynch began a one-day discussion on Tuesday over the India-US Bilateral Trade Agreement (BTA). So far, five rounds of talks have taken place. The sixth round, planned for August 25-29, was delayed after the US imposed a 50 percent tariff on Indian goods. This move impacted India’s export sector. Last week, Prime Minister Narendra Modi welcomed US President Donald Trump’s positive remarks on ongoing talks. He expressed confidence that the negotiations would “pave the way to unlock the limitless potential of the partnership between both nations.”
Akshay Didwaniya
