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The Indian rupee surged to a one-month high on Wednesday, closing at ₹85.31 against the U.S. dollar, driven by strong foreign fund inflows and growing confidence in a potential interim trade agreement between India and the United States.
Market sentiment turned positive as negotiators from both countries in Washington showed signs of progress ahead of the July 9 tariff deadline. The possibility of a last-minute deal—expected to ease duties and improve access for key Indian exports—has boosted investor confidence.
Analysts say the rally reflects broader optimism around India’s external trade outlook and signals strengthening macroeconomic fundamentals.
“The rupee’s rally is supported by inflows, strong FX reserves, and hopes of a resolution on trade tariffs,” said a senior currency strategist at a Mumbai-based bank.
The Reserve Bank of India (RBI) has so far refrained from aggressive intervention, allowing the currency to benefit from global risk-on sentiment.