Representative image of Indian rupees.
Credit: Pixabay Photo
Mumbai: The rupee surged 38 paise to hit its three-month high level of 83.04 against the US dollar in early trade on Monday boosted by a robust sentiment in domestic equity markets on the back of strong macroeconomic data and exit poll results showing a third term for the Prime Minister Narendra Modi-led government.
A weak American currency and inflow of foreign capital into domestic equities also supported the local unit, forex traders said.
At the interbank foreign exchange market, the local unit opened at 83.09 and gained further to trade at 83.04 against the greenback in initial deals, registering an increase of 38 paise from its previous close. The rupee had breached the 83.00 level on March 18 this year.
The local unit clocked the highest single-day rise since April 2023 when it appreciated by 42 paise.
On Friday, the rupee declined 13 paise to close at 83.42 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.06 per cent lower at 104.56.
Brent crude futures, the global oil benchmark, fell 0.06 per cent to USD 81.06 per barrel.
On the domestic equity market, the 30-share BSE Sensex was trading 1,912.00 points, or 2.59 per cent higher at 75,873.31 points. The broader NSE Nifty soared 597.10 points or 2.65 per cent to 23,127.80 points in initial trade.
Most of the exit polls on Saturday predicted that Prime Minister Narendra Modi will retain power for a third straight term, with the BJP-led NDA expected to win a big majority in the Lok Sabha elections.
The finance ministry on Saturday said the country's Goods and Services Tax (GST) collections grew 10 per cent to Rs 1.73 lakh crore in May driven by an increase in domestic transactions, indicating a sustained economic momentum.
Foreign investors were net buyers of Indian equities on Friday as they purchased shares worth Rs 1,613.24 crore on a net basis. FIIs bought shares worth Rs 95,467.56 crore and sold equities worth Rs 93,854.32 crore in one of the record foreign investor activities in the cash segment.
The government data released on Friday showed India's economy grew by 8.2 per cent in the fiscal year that ended in March, cementing the country's position as the fastest-growing major economy in the world.
The central government's fiscal deficit during 2023-24 at 5.6 per cent of the GDP was better than previous estimates of 5.8 per cent on account of higher revenue realisation and lower expenditure, according to official data released on Friday.
The country's forex reserves dropped by USD 2.027 billion to USD 646.673 billion for the week ended May 24, the Reserve Bank said on Friday. In the previous reporting week, the kitty had reached an all-time high of USD 648.7 billion after a jump of USD 4.549 billion.