Rupee Strengthens Against US Dollar After Union Budget 2026-27 Presentation
The Indian rupee showed resilience in early trade on Monday, gaining 37 paise to trade at 91.56 against the US dollar. This positive movement came on the heels of the presentation of the Union Budget 2026-27, with the rupee benefiting from a decline in crude oil prices.
While the budget provided some reassurance to the currency, concerns lingered among forex traders due to the government’s substantial borrowing plans and the impact it could have on investor sentiment. The government is set to borrow Rs 17.2 lakh crore in the upcoming financial year to finance a fiscal deficit projected at 4.3 per cent of the GDP.
Opening at 91.95 against the US dollar at the interbank foreign exchange market, the rupee strengthened to 91.56, marking a notable gain over its previous close. This positive movement followed Friday’s record low of 92.02 before ending slightly higher at 91.93 against the US dollar.
CR Forex Advisors MD Amit Pabari commented on the budget, noting its focus on growth, stability, and fiscal discipline. While short-term pressure may persist, the broader message of fiscal credibility and growth continuity bodes well for medium-term prospects.
Pabari highlighted the key near-term pivot level for USD/INR at just below 92.00, suggesting that a sustained break above this level could pave the way towards 92.20-92.50. Meanwhile, the dollar index, which measures the strength of the greenback against a basket of currencies, was trading slightly higher at 97.08.
On the commodities front, Brent crude, the global oil benchmark, saw a 4.24 per cent decrease in futures trade, trading at USD 66.38 per barrel. This drop followed discussions between the US and Iran to avoid potential US strikes on Iranian soil, which had initially raised oil prices to USD 72 per barrel over the weekend.
In the domestic equity market, the Sensex rose by 302 points to 81,024.94, while the Nifty saw an increase of 59.25 points to 24,884.70. However, market sentiment was affected by the Union Budget, particularly due to higher securities transaction tax on derivatives and changes to buyback taxation, leading to increased costs for investors.
Foreign Institutional Investors also offloaded equities worth Rs 588.34 crore, according to exchange data, reflecting the cautious approach taken following the budget announcement.
