Rupee flat as Fed rate cut bets, GST cuts lift sentiment; opens at 88.06/$

Indian Rupee today: The domestic currency opened one paise higher at 88.06 against the greenback on Thursday

The Indian Rupee traded flat on Thurday as traders assessed the impact of the revamped Goods and Services Tax (GST) that was unveiled by the Finance Minister on Wedneday. 

 

The domestic currency opened one paise higher at 88.06 against the greenback on Thursday, according to Bloomberg. So far this year, the rupee has depreciated 2.87 per cent, making it the worst performer among Asian peers.

 

The currency recovered to 87.07 after touching 88.20 on Wednesday, but is likely to open flat after US President Donald Trump signalled a second round of tariffs on India, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. Despite inflows and a softer dollar index, bids capped further gains, he said. 

 

   

With GST rate cuts supporting sentiment, the rupee is expected to trade in the 87.90-88.40 range today, Bhansali said. 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.

 

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 down 0.07 per cent at 98.21.   ALSO READ: GST on lifesaving drugs reduced to nil: Check full list of tax on medicines 

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 0.52 per cent at 67.25 per barrel, while WTI crude prices were lower by 0.64 per cent at 63.56 per barrel, as of 9:15 AM IST.

  ALSO READ: GST on lifesaving drugs reduced to nil: Check full list of tax on medicines