Rupee Appreciates By 12 Paise Against The Dollar in Early Trade Today

Mumbai | June 2, 2025: The Indian rupee gained 12 paise to trade at 85.43 per US dollar in early trade on Monday, 2nd June, 2025.

RBI Outlook and Economic Momentum

Investor sentiment was buoyed by stronger-than-expected GDP growth, robust GST collections, and rising forex reserves. These indicators have increased the likelihood of a rate cut in the RBI’s Monetary Policy Committee (MPC) meeting starting June 4, with a policy decision scheduled for June 6.

Markets are also awaiting this week’s PMI data for manufacturing and services, which may offer further direction.

Currency Movement and Market Dynamics

At the interbank foreign exchange, the rupee opened at 85.55, then strengthened to 85.43, up from Friday’s close of 85.55 — reversing the 7-paise decline seen in the previous session.

The US dollar index fell 0.05% to 99.21, helping support the rupee’s gains.

External Pressures Weigh In

Despite the uptick, analysts caution that rising crude oil prices, continued foreign fund outflows, and stock market volatility could restrain the rupee’s upward movement.

Brent crude futures climbed 2.12% to USD 64.11 per barrel, stoking concerns about India’s import costs and inflationary pressures.

Meanwhile, foreign institutional investors (FIIs) pulled out Rs 6,449.74 crore from Indian equities on Friday, dampening broader sentiment.

Stock Market Decline

Indian equities opened sharply lower on Monday. The BSE Sensex fell 709.10 points or 0.87% to 80,741.91, while the NSE Nifty slid 196.00 points or 0.79% to 24,554.70, amid weak global cues and profit booking.

Robust Economic Indicators

India’s economy expanded by 7.4% in Q4 FY25, supported by strong private consumption and growth in manufacturing and construction.

The fiscal deficit target of 4.8% of GDP for FY25 was met, reinforcing fiscal discipline.

GST collections remained strong at Rs 2.01 lakh crore in May, maintaining momentum after April’s record Rs 2.37 lakh crore.

Forex reserves rose by USD 6.992 billion to USD 692.721 billion in the week ending May 23, signalling a solid external position.

Outlook

Despite global headwinds, India’s strong economic fundamentals an.d potential for a dovish RBI stance may help stabilise the rupee in the near term. Markets will now look to upcoming policy announcements and macro data for further cues

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Disclaimer: At HDFC SKY, we take utmost care and due diligence in curating and presenting news and market-related content. Every effort is made to ensure the accuracy, relevance, and timeliness of the information provided. However, inadvertent errors or omissions may occasionally occur.

Should you have any concerns, queries, or wish to point out any discrepancies in our content, please write to us at content@hdfcsec.com. Your feedback is valuable and helps us maintain the highest standards of content integrity.

Please note that the information shared is intended solely for informational purposes and should not be construed as investment advice. Users are advised to consult their financial advisors before making any investment decisions.