August 20, 2025

Hold your breath, rupee fans! The Indian rupee got a juicy boost, appreciating by 40 paise to close at 86.99 (provisional) against the US dollar on Tuesday. What’s lighting up the rupee's smile? Thrilling optimism over the big GST shake-up plans announced by Prime Minister Narendra Modi and a blushingly strong domestic stock market. Forex traders are buzzing with excitement, partly because the tense US tariff drama calmed down after the US President Donald Trump met with Russian President Vladimir Putin. How did Tuesday’s rupee dance go? It opened at 87.24, dipped a bit to 87.31, shot up to a high of 86.92, and then proudly settled at 86.99, marking a sweet 40 paise gain from Monday’s close, when it nudged up 20 paise to 87.39. Anuj Chaudhary, Research Analyst at Mirae Asset Sharekhan, said, "The Indian rupee rose to the highest levels in a month on optimism over GST restructuring as announced by Prime Minister Narendra Modi at the Independence Day speech. Easing worries over additional tariffs by the US also boosted market sentiments." Now, hold on to your hats for the GST news! India plans to simplify the confusing current tax slabs. The current nil, 5%, 12%, 18%, and 28% tax levels could be replaced by just two major slabs: a low 5% and a middle 18%, plus a jaw-dropping special 40% top slab for certain ‘demerit’ goods. This means goodbye to the 12% and 28% rates, if the GST Council gives a thumbs up. This GST magic is expected to pump energy into the rupee along with other factors like falling crude oil prices and a weaker US dollar. Chaudhary predicts, "We expect the rupee to trade with a positive bias on upbeat domestic market sentiments due to GST rationalisation and fading trade tariff concerns." Still, slightly hungry importers needing more dollars might limit the rupee’s gallop. Traders will also watch important US housing data to guess rupee moves. On the energy front, Brent crude oil slid 1.04% to $65.91 a barrel, as cautious hopes build around the Ukraine-Russia conflict. Meanwhile, the US dollar index slipped by 0.13% to 98.04, signaling a softer greenback. The Indian stock markets are cheering too! Sensex jumped by a dazzling 370.64 points to close at 81,644.39, while Nifty bounced back 103.70 points to 24,980.65. Adding more sparkle, Foreign Institutional Investors pumped Rs 550.85 crore into Indian equities on Monday. So, with positive vibes fresh from GST talks, a happy stock market, easing global tensions, and softer oil prices, the rupee looks ready to shine even brighter. Will it keep up the good show? Traders and watchers, stay tuned!

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Tags: Rupee, Us dollar, Gst restructuring, Indian stock market, Forex, Oil prices,