What caused the Indian rupee to rebound from its all-time low?

The Indian rupee rebounded due to a decline in the US dollar index and positive market sentiment following the conclusion of India-EU Free Trade Agreement negotiations.

What are the key benefits of the India-EU Free Trade Agreement?

The India-EU FTA will grant Indian sectors like apparel, chemicals, and footwear duty-free entry into the EU, while the EU gains market access for cars and wines in India.

Home / Business and Economy / Rupee Gains 19 Paise, Bounces From All-Time Low

Rupee Gains 19 Paise, Bounces From All-Time Low

Q: What factors could limit further gains for the Indian rupee?

Factors that may limit further gains for the rupee include rising commodity and crude oil prices, ongoing geopolitical tensions, and selling pressure from foreign institutional investors.

27 Jan

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Summary

The rupee rose 19 paise to close at 91.71 against the US dollar.
India-EU free trade agreement negotiations concluded, boosting market sentiment.
Geopolitical tensions and FII selling may pressure the rupee at higher levels.

Rupee Gains 19 Paise, Bounces From All-Time Low

The Indian rupee experienced a rebound, appreciating by 19 paise to settle at 91.71 against the US dollar on Tuesday. This recovery marked a significant bounce from its previous all-time low. The appreciation was largely attributed to a weaker US dollar index and the optimistic market sentiment generated by the conclusion of free trade agreement negotiations between India and the European Union.

These negotiations, described as the 'mother of all deals,' are anticipated to create a substantial market of approximately 2 billion people. Sectors like apparel, chemicals, and footwear in India are expected to gain duty-free access to the 27-nation EU bloc. In return, the EU will see concessional duty access for products such as cars and wines in the Indian market.

Despite the positive developments, certain factors could impede further gains for the rupee. These include rising commodity and crude oil prices, ongoing geopolitical tensions, and selling pressure from foreign institutional investors. The US dollar index saw a minor dip, trading 0.02 percent lower, while Brent crude futures experienced a slight increase. The domestic equity market, however, showed strength with the Sensex and Nifty indices climbing significantly.