 "Rupee reverses early gains despite GST cuts; ends 9 paise lower at 88.15/$")
The Indian Rupee failed to maintain its early gains on Thursday and ended lower as trade-related outflow concerns offset the positive sentiment from the government's consumption boost.
The domestic currency closed nine paise higher at 88.15 against the greenback on Thursday, according to Bloomberg. So far this year, the rupee has depreciated 2.97 per cent, making it the worst performer among Asian peers.
The currency traded weak as foreign portfolio investors (FPIs) remained sellers while GST reform expectations provided limited support, according to Jateen Trivedi, VP research analyst - commodity and currency at LKP Securities. "Selling pressure was visible in capital markets after a higher opening, keeping the rupee under pressure."
The GST Council, chaired by the Union Finance Minister, reached a consensus on Wednesday to adopt a simplified two-tier rate structure. The new rates will take effect from September 22, the first day of Navratri.
Tax levied on household consumption items, handicrafts, agriculture-related goods and more goods will not attract a 5 per cent tax. A special rate of 40 per cent will apply to all tobacco-related products. All individual life and health insurance policies will be exempt from GST. To know more about what gets cheaper, CLICK HERE.
India’s gross domestic product (GDP) grew 7.8 per cent in the first quarter (April-June) of the financial year 2025-26 (FY26), hitting a five-quarter high. The manufacturing purchasing managers index (PMI) touched a nearly 18-year high of 59.3 in August.
Global funds have been net sellers in stocks in the first three days of September and have sold equities worth ₹1.42 trillion so far this year, according to NSDL data
Meanwhile, the dollar index rose slightly after weak US economic data fueled expectations of rate cuts by the Federal Reserve. Job openings in the US fell to a 10-month low, upping the September Fed rate cut bets. The dollar index, a measure of the greenback against a basket of six major currencies, was up 0.17 per cent at 98.30.
The dollar index stayed volatile, with participants now focusing on the upcoming US Nonfarm Payrolls and Unemployment data, which will set the tone for global currencies, Trivedi said. "Rupee is expected to trade in the range of 87.85 - 88.45."
In commodities, crude oil prices extended losses as traders awaited the upcoming Opec+ meeting, where further increases in output targets are expected. Brent crude price was down 1.09 per cent at 66.86 per barrel, while WTI crude prices were lower by 1.19 per cent at 63.21 per barrel, as of 3:28 PM IST.