The rupee appreciated by 1% to settle at 94.9 against the US dollar on Friday, June 5 after the introduction of a set measures to bring foreign capital in the country. On Thursday, the Indian currency closed at 95.79 against dollar.
Following the latest appreciation, rupee erased weekly losses, while it still remains around 5% below pre US-Iran War levels.
The government introduced the Income-tax (Amendment) Ordinance, 2026 on June 5 and made effective retrospectively from April 1, 2026, granting eligible foreign investors an exemption on both interest income and capital gains earned from investments in government securities. Foreign Institutional Investors and Foreign Portfolio Investors will no longer pay the 12.5 per cent long-term capital gains tax on listed G-Secs held for more than one year, nor the 20 per cent withholding tax on interest income that applied until now.
Additionally, the Reserve Bank of India announced a set of measures to attract foreign capital into the country, as net outflows from overseas portfolio investors touched US$ 13.7 billion in the current financial year and the rupee continues to face pressure from a risk-off global environment fuelled by the ongoing US-Iran conflict.
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