By Nimesh Vora
MUMBAI (Reuters) – The Indian rupee climbed to its highest level so far this month, supported by lower risks of additional U.S. tariffs on domestic goods and optimism that planned tax cuts will bolster growth.
The rupee rose as much as 87.2050 per U.S. dollar on Tuesday, compared with 87.35 in the previous session. It was last at 87.2250.
The currency is being supported by the Trump-Putin meeting and subsequent talks between the U.S. and Ukrainian presidents, raising hopes a peace deal. This, Nomura said in a note, “appears to reduce the likelihood of additional tariffs/sanctions on India in relation to the purchase of Russia oil”.
Nomura further highlighted that Trump, after his meeting with Putin, said the tariff/sanction path will be delayed.
An escalation in U.S. tariffs on India could have driven the USD/INR to break past key levels on the upside.
Indian Prime Minister Modi’s planned cuts on goods and services tax (GST) is expected to support consumption and has also lifted sentiment in the rupee. Economists said the measures could provide a near-term boost to growth momentum and help offset the drag from weak external conditions.
The rupee’s Asian peers were mostly lower on Tuesday, pegged back by a rise in U.S. yields. The 10-year U.S. yield hit the highest in two weeks on Monday.
(Reporting by Nimesh Vora; Editing by Sonia Cheema)
