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The rupee gained 26 paise to trade at 94.96 per U.S. dollar on Tuesday (September 1, 2026) morning, on robust domestic growth, contained fiscal slippage, and portfolio-related inflows.
Forex traders said the USD/INR pair appears to have found a strong near-term base around 95.10-95.20. While MSCI-related inflows have provided temporary support.
At the interbank foreign exchange market, the rupee opened at 95.06, then gained ground to touch 94.96 against the U.S. dollar, registering a gain of 26 paise from its previous close.
On Monday (August 31, 2026), the rupee pared initial losses and settled for the day with gains of 21 paise at 95.22 against the U.S. dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 99.46, higher by 0.03%.
Brent crude, the global oil benchmark, was trading higher by 0.63% at $91.06 per barrel in futures trade after U.S. President Donald Trump warned that the United States would “hit Iran hard” following missile attacks on American military bases in Jordan.
On the domestic equities market front, Sensex declined 121.48 points to 76,835.79 in early trade, while the Nifty dipped 52.6 points to 24,027.80.
Foreign institutional investors offloaded equities worth ₹7,985.88 crore on a net basis on Monday (August 31, 2026), according to exchange data.
FPIs invested around $3.1 billion in August, their strongest monthly inflow in 23 months and the second consecutive month of net buying.
However, foreign investors remain net sellers of around $24.6 billion so far in 2026. “So, the direction has improved — but the broader foreign-flow picture is still not completely comfortable,” Mr. Pabari added.
On the macroeconomic front, India’s economy grew at a faster-than-expected 7.8% in the April-June quarter, showing resilience in the face of concerns that the war in Iran and resulting global economic uncertainty could weigh on growth.
“The data is particularly noteworthy because it came during a period marked by Middle East tensions and elevated crude prices. Strong growth does not automatically strengthen a currency, but it does reinforce the perception that India’s domestic economy remains resilient despite global turbulence,” CR Forex Advisors MD Amit Pabari said.
Meanwhile, the central government’s fiscal deficit for 2026-27 stood at 26.8 per cent of the full-year target at the end of July, according to data released by the Controller General of Accounts (CGA) on Monday.
The deficit was at 29.9% of Budget Estimates (BE) of 2025-26 for the first four months of the previous financial year.
Published – September 01, 2026 12:29 pm IST
