The Indian rupee ended stronger against the US dollar on Thursday.
The local currency strengthened by 29 paise to close at Rs 86.66 against the greenback, according to Bloomberg. It closed at 86.95 on Wednesday.
India’s economy is expected to demonstrate a strong momentum in the second half of the year, buoyed by resilient domestic demand and strategic policy interventions, according to the latest RBI Bulletin.
Economic indicators are pointing towards a steady recovery in the second half of the year, as the urban demand is set for a revival, supported by easing inflation and increased disposable incomes, due to significant income tax relief announced in the Budget, according to Amit Pabari, managing director of CR Forex Advisors.
Additionally, the Budget’s focus on agriculture, MSMEs, investment, and exports is expected to fuel medium-term economic growth making Indian assets more attractive. Robust kharif output, improved rabi sowing, and a seasonal correction in vegetable prices are expected to ease food inflation. Meanwhile, the real effective exchange rate depreciated by 2.2%, improving India’s export competitiveness on the global stage.
“Indian rupee was protected by the RBI. FPIs continued to be sellers of equity yesterday by about Rs 2,000 crore. They have sold more than Rs 1 lakh crore in the last 1.5 months,” said Anil Kumar Bhansali, head of treasury and executive director of Finrex Treasury Advisors LLP.
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