Rupee Jumps 28 Paise To Settle At 83.14 Against US Dollar

The rupee jumped to over two-month high closing level and settled with a gain of 28 paise at 83.14 (provisional) against the US dollar on Monday, tracking over 3 per cent surge in domestic equity benchmarks after exit poll results predicted a firm comeback of the ruling BJP-led government for the third straight term, according to PTI report.

Forex analysts attributed the steep rise in the local unit to a number of positive factors such as strong domestic macroeconomic data, inflow of foreign funds and a weak American currency against major Asian rivals. Also, they said lower level of the crude oil prices after OPEC+ grouping's decision to maintain the status quo in the oil output supported the Indian currency, added the PTI report.

Earlier, Indian rupee witnessed rally of 42 paise to 83.00 against US Dollar in morning trade on Monday, June 3, 2024 ahead of the Lok Sabha elections outcome scheduled to be declared on June 4, 2024.

Earlier, rupee gained 5 paise to 83.24 against the US dollar in morning trade on Friday amid strong boost by robust sentiment in domestic equity markets and a downward trend in the crude oil prices overseas.

Meanwhile, despite the decision by the OPEC+ producer group to extend strong output cuts well into 2025, oil prices witnessed a fall early on Monday. Brent futures for August delivery declined by 24 cents, or 0.3%, to $80.87 a barrel at 0030 GMT.

According to a Reuters report, Indian rupee is expected to rally at the open on Monday after exit polls indicated a third term for Prime Minister Narendra Modi. Non-deliverable forwards indicate the rupee will open at 83.10-83.12 to the U.S. dollar, compared with 83.4625 in the previous session.

The Reuters report said, the "big down move" at the open for the dollar/rupee will "likely run into good buying interest", a forex trader at a bank said.

"If the exit polls are accurate ... it would leave the BJP with a very strong mandate from which to continue enacting growth-enhancing structural reforms," Capital Economics said in a note.