By Nimesh Vora
MUMBAI (Reuters) – The Indian rupee rose on Monday, with traders pointing to upbeat risk appetite after Prime Minister Modi announced sweeping tax cuts and on fading risks following the Trump-Putin meeting.
The rupee was quoting at 87.3925 to the U.S. dollar at 11.10 a.m. IST, up from 87.55 on Thursday.
India’s financial markets were shut for a local holiday on Friday.
“The (dollar/rupee) pair feels heavier, with sellers more active. The thing is that now it’s difficult to see a big up move here and that has probably allowed a pick up in offers,” a currency trader at a bank said.
“I am keeping 87.20 – the 21-day moving average – on the radar for the downside.”
Prime Minister Narendra Modi’s planned tax cuts have been a key boost for the rupee and prompted a rally in Indian equities. The measures could help revive foreign portfolio flows, which have been negative of late amid concerns over higher U.S. tariffs on Indian goods, traders said.
Those worries have likely waned a bit after the Trump–Putin meeting in Alaska on Friday, where the U.S. president said no additional sanctions would be imposed on Russia for now.
Analysts noted that the signal could be considered a modest positive for the rupee, considering how India has been singled out by Trump for its oil purchases from Russia.
The rupee’s near-term trajectory is seen hinging on U.S. trade policy towards India, with Trump’s additional 25% tariffs scheduled to take effect next Wednesday. Hopes of averting the tariffs dimmed after Washington cancelled a planned August 25–29 visit by trade negotiators to New Delhi.
(Reporting by Nimesh Vora; Editing by Sonia Cheema)
