Synopsis: The Indian rupee surged to a 7-month high of 83.76 against the US dollar, recovering all losses since Trump’s 2024 election win. This sharp rise is fueled by strong foreign inflows, upbeat GST data, and a weaker dollar.
In a significant rebound, the Indian rupee hit a seven-month high of 83.76 against the US dollar on Friday, surging 78 paise in morning trade and recovering all its losses incurred since Donald Trump’s US presidential victory in November 2024.
The rupee opened at 83.98 at the interbank foreign exchange and quickly gained ground, buoyed by sustained foreign institutional investments (FIIs) and a wave of positive domestic macroeconomic indicators, especially record-breaking GST collections for April.
Forex traders attributed the rally to consistent foreign fund inflows and growing investor confidence in India’s economic fundamentals. The rupee had earlier slumped to a historic low of 87.95 in February 2025 amid global uncertainty around Trump’s tariff moves, but has since staged a robust recovery through March and April.
Key Drivers Behind the Surge
1. Foreign Fund Inflows:
FIIs bought equities worth Rs 50.57 crore on Wednesday alone, pushing domestic markets to record levels. The BSE Sensex jumped 722.82 points to 80,965.06, while the Nifty rose 203.70 points to 24,537.90.
2. Robust GST Collection:
GST mop-up for April stood at a historic Rs 2.37 lakh crore, a 12.6% YoY increase, signaling strong domestic demand and tax compliance. This reinforces confidence in India’s economic resilience and policy reforms.
3. Global Dollar Weakness:
The Dollar Index slipped 0.27% to 99.97, weakening the greenback against a basket of currencies and aiding the rupee’s appreciation. However, experts warn that the index could rebound toward 102, potentially capping rupee gains.
4. Brent Crude Stability:
Global crude benchmark Brent rose modestly by 0.55% to $62.45 per barrel, providing relief to India’s oil import bill and supporting the rupee.
Expert Views
CR Forex Advisors MD Amit Pabari noted that the rupee’s 2% gain in March was its best since 2018, citing a weakening US dollar and strong portfolio flows. However, he warned that geopolitical tensions, especially with Pakistan over Kashmir, remain a risk to rupee stability.
A report from Nomura echoed similar sentiments, expressing optimism about India’s position in the global supply chain reset under Trump’s second term. However, it flagged the fragile geopolitical environment as a potential trigger for renewed volatility.
Disclaimer: This article is for informational purposes only and should not be construed as investment or financial advice. Readers are encouraged to consult professionals or official data sources for specific guidance.
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