The Indian Rupee strengthened on Monday after the latest data showed that the economy grew at a faster pace than in the previous quarter, calming traders amid fresh tariff threats by US President Donald Trump.
The currency strengthened by 17 paise to open at 87.34 against the US Dollar. The rupee closed at 87.51 against the greenback on Friday.
The gross domestic product grew 6.2% over a year earlier in the October-December quarter. This was compared with a revised growth of 5.6% in the July-September quarter.
GDP growth for the quarter was in line with estimates. A Bloomberg poll of economists pegged GDP and GVA growth at 6.2% for the third quarter. The gross value added, which strips out indirect tax and subsidies, is estimated to have grown at 6.2% in the third quarter.
Meanwhile, Donald Trump on Friday announced he will impose an additional 10% tariffs on Chinese imports starting March 4. The proposed 25% tariff on Mexican and Canadian goods will also go into effect on that day.
India's economic performance has shown resilience, with GDP growth for the last quarter, according to Amit Pabari, managing director, of CR Forex Advisors. Given the confluence of global and domestic factors, the rupee is expected to remain at elevated levels in the near term. "Strong support is observed at 87.00, while resistance lies in the 87.50-87.60 range."
The Indian rupee is trading near its strong resistance at the 87.40 mark, weighed down by weak domestic market trends and persistent foreign fund outflows, Pabari said. "Investor sentiment remains fragile, particularly as the latest tariff measures announced by the United States add to global economic uncertainties, further strengthening the US dollar and pressuring the rupee."
The dollar index — which tracks the greenback's performance against a basket of 10 leading global currencies — was 0.34% down at 107.24. Meanwhile, crude oil rose at the start of the week due to rising tensions related to the Russia-Ukraine war. The Brent crude was up 0.52% at $73.19 a barrel as of 9:19 a.m. IST, and the West Texas Intermediate was up 0.52% at $70.12.
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