Currency: Indian Rupee Crushes The U.S. Dollar Today

Juhi Mirza
BRICS US dollar USD Indian Rupee INR
Source: Reuters / ShutterStock

India’s stock market indices surprised the global markets today by helping the Indian rupee spike and surge against the U.S. dollar. The U.S. dollar stands at the 83.04 metrics threshold against the INR, which in turn has gained 42 Paisa, bolstering its stance in the forex space

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Why Is The Indian Rupee Up Against The U.S. Dollar?

brics indian rupee us dollar
Source: Bloomberg

In a rare incident, the Indian rupee has gained a significant surge against the U.S. dollar. The rupee is trading at $0.012, up by nearly 42 paisa, which is deemed “notable” to a certain extent, per analysts and forex strategists.

The surge against the U.S. dollar was contributed to by the ongoing electoral campaigns that the nation is currently embroiled in. India is currently in the process of conducting its parliamentary elections, through which the nation will be selecting its upcoming prime minister.

With the majority of exit polls or media surveys hinting at PM Modi’s return to the “office,” the stock market indices noted a heavy surge of activity. This in turn spiked the Sensex by 3%, boosting the index by 2,000 points. Therefore, trouble is brewing for the U.S. dollar this week and not the Indian rupee.

The positive financial overturn had a direct impact on the valuation of the Indian rupee, or INR. At press time, the INR has gained 42 paisa against the U.S. dollar. The spike is deemed a noteworthy surge spurred by the ongoing parliamentary election campaigns in the nations.

What Next For Both The Currencies?

As the media predict PM Modi’s euphoric return, the final results of the voting are yet to be announced. The results will be out on June 4, ultimately sealing the fate of India’s future for the next five years. However, the predictions or exit polls have already started to share forecasts, ushering in a wave of financial buzz. A surge in foreign investments has also taken place, bringing new profits for India’s foreign investors to explore and extract. The Indian rupee has an upper hand against the U.S. dollar this week due to the election results.

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“Foreign investors were net buyers of Indian equities on Friday as they purchased shares worth Rs 1,613.24 crore. On a net basis. FIIs bought shares worth Rs 95,467.56 crore and sold equities worth Rs 93,854.32 crore in one of the record FI.” Deccan Herald reported

The anticipation of PM Modi’s win for the third time is amping the stock market to maintain its winning streak. At the same time, such prospects could play an elemental role in boosting the value of INR against the USD. This could ultimately end up hampering the US dollar’s prestige in the wake.