Finance
The Indian rupee failed to hold onto its early gains on Thursday, ending weaker as trade-related outflow concerns outweighed the positive emotion from the government’s spending increase.
Bloomberg reports that the domestic currency closed nine paise higher at 88.15 against the greenback on Thursday. So far this year, the rupee has fallen 2.97 percent, making it the weakest performer among Asian peers.
The currency traded weak as foreign portfolio investors (FPIs) remained sellers while GST reform expectations provided limited support, according to Jateen Trivedi, VP research analyst – commodity and currency at LKP Securities. “Selling pressure was visible in capital markets after a higher opening, keeping the rupee under pressure.”
The GST Council, chaired by the Union Finance Minister, agreed on Wednesday to implement a streamlined two-tier rate structure. The new tariffs will take effect on September 22nd, the first day of Navratri.
Taxes on domestic consumption items, handicrafts, agricultural-related goods, and other goods shall not be imposed at 5%. Tobacco-related products will be taxed at a special 40% rate. Individual life and health insurance policies will be free from GST. To learn more about what becomes cheaper.
India’s GDP increased by 7.8 percent in the first quarter (April-June) of the fiscal year 2025-26 (FY26), setting a five-quarter high. The manufacturing purchasing managers index (PMI) reached a nearly 18-year high of 59.3 in August.
According to NSDL data, global funds sold equities worth ₹1.42 trillion in the first three days of September this year.
Meanwhile, the dollar index climbed marginally as dismal US economic data boosted prospects of Fed rate cuts. Job opportunities in the United States fell to a 10-month low, increasing the September Fed rate cut chances. The dollar index, which measures the greenback against a basket of six major currencies, was up 0.17 percent at 98.30.
The dollar index stayed volatile, with participants now focusing on the upcoming US Nonfarm Payrolls and Unemployment data, which will set the tone for global currencies, Trivedi said. “Rupee is expected to trade in the range of 87.85 – 88.45.”
Crude oil prices fell more as traders awaited the impending Opec+ meeting, which is expected to raise output objectives further. Brent crude prices fell 1.09 percent to 66.86 per barrel, while WTI crude prices fell 1.19 percent to 63.21 per barrel as of 3:28 PM IST.
Source: BS
