Rupee rises 9 paise to 87.28 against US dollar in early trade

The rupee appreciated 9 paise to 87.28 against the US dollar in early trade on Monday (February 3) as the American currency index retreated from elevated level and domestic equity markets indicated some recovery after firm macroeconomic data.According to forex traders, withdrawal of foreign capital is expected to halt as the latest government data released on Friday (February 28) showed the country’s economy grew by 6.2% in the October-December quarter, recovering sequentially from seven-quarter lows.

However, the volatility triggered by the US tariff continued to linger, leading to an increase in crude oil prices and capping a sharp gain in the domestic currency, they said.

At the interbank foreign exchange, the rupee opened at 87.36 and gained further ground to 87.28 against the American currency, registering a gain of 9 paise from its previous close.On Friday (February 28), the rupee fell 19 paise to settle at 87.37 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.34% lower at 107.19.

Brent crude, the global oil benchmark, rose 0.59% to $73.24 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex was trading 167.25 points or 0.23% higher at 73,365.35 in morning trade, while Nifty was up 69.65 points or 0.31% to 22,194.35.The Reserve Bank on Friday (February 28) conducted US dollar-rupee swap worth $10 billion for injecting long-term liquidity in the system, with the auction eliciting robust demand. The settlement of auction will take place on March 4 and March 6.

Under the swap exercise, a bank shall sell US dollars to the Reserve Bank and simultaneously agree to buy the same amount of US dollars at the end of the swap period.

Foreign Institutional Investors (FIIs) offloaded equities worth ₹11,639.02 crore in the capital markets on net basis on Friday, according to exchange data.

The latest Reserve Bank data released on Friday showed the country’s forex reserve jumped by $4.758 billion to $640.479 billion in the week ended February 21.

In the previous reporting week, the overall reserves had dropped by $2.54 billion to $635.721 billion.

Also, the official data released on Saturday showed gross GST collections rose by 9.1% to about ₹1.84 lakh crore in February, boosted by domestic consumption and indicating potential economic revival.

However, the government’s fiscal deficit touched 74.5% of the annual target at the end of January 2025, according to the data released by Controller General of Accounts (CGA). The deficit was 63.6% of Revised Estimates (RE) of 2023-24 in the year-ago period.