Forex News: Indian Rupee Rises To 2-week High On GST

Indian Rupee Rises To 2-week High On GST Reforms Push

(RTTNews) - The Indian rupee strengthened against the U.S. dollar in the European session on Monday, after Prime Minister Narendra Modi unveiled plans of the biggest tax overhaul since 2017 over the weekend, boosting stocks across sectors like auto, financial, real estate, consumer and cement.

With robust GST collections and a broad tax base, government sources indicated that nearly 90 percent of the items in the 28 percent slab will now move to 18 percent.

Almost all the goods in the 12 percent slab will move to 5 percent, thus effectively making nearly all essential goods and household items cheaper.

Analysts said the GST reforms and rate cuts that would come into effect around Diwali this year would help offset the fallout from higher U.S. tariffs.

S&P upgraded India's rating to BBB, from BBB- with a stable outlook last week and said the economy's growth prospects won't be derailed by U.S. President Donald Trump administration's 50 percent tariff shock to the country.

Meanwhile, Friday's summit between U.S. President Donald Trump and Russian President Putin in Alaska yielded no concrete agreements, but Russia agreed to "game-changing" security guarantees for Ukraine, helping inject new momentum into stalled efforts to end the Russia-Ukraine war.

The leaders of the U.K., France and Germany will accompany Ukraine's president for crunch talks with Trump at the White House later today in a bid to come to a negotiated settlement in the three-and-a-half-year-old conflict.

Investors also await Trump-Zelenskyy meeting at the White House on Monday. Against the U.S. dollar, the rupee rose to a 2-week high of 87.30 from an early low of 87.55.

If the rupee extends its uptrend, it is likely to find resistance around the 86.00 region.

Looking ahead, Canada housing starts for July and U.S. NAHB housing market index for August are slated for release in the New York session.

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