Rupee jumps 53 paise to 73.07 against US dollar in early trade

The rupee strengthened 53 paise to 73.07 against the US dollar in opening trade on Tuesday supported by weak American currency and positive domestic equities.

Forex traders said the domestic unit gathered momentum after the Reserve Bank of India announced various steps to ease pressure on liquidity.

At the interbank forex market, the domestic unit opened at 73.18 against the US dollar, gained further ground and touched 73.07 against the US dollar, registering a rise of 53 paise over its previous close.

It had settled at 73.60 against the US dollar on Monday.

"The rupee strengthened post the initial weakness as RBI said a stronger rupee would help tone down inflationary pressure," said Abhishek Goenka, Founder and CEO, IFA Global.

The Reserve Bank on Monday announced a host of steps, including term repo operations totalling Rs 1 lakh crore in mid-September to ease pressure on the liquidity and maintain congenial financial conditions with a view to ensuring sustainable recovery of economic growth.

Moreover, financial sector regulators, including the RBI and Sebi, on Monday reaffirmed their commitment to continue co-coordinating on various initiatives to strengthen the financial sector.

On weak April-June gross domestic product (GDP) data, Goenka said "India Q1 GDP came in at (-) 23.9 per cent against expectations of (-) 19 per cent. Q1 included months when the country was in a state of lockdown. Therefore, the print does not matter as much now as the high frequency data does."

Meanwhile, on the domestic equity market front, the 30-share BSE benchmark Sensex was trading 80.75 points higher at 38,709.04, and the broader NSE Nifty advanced 49.90 points to 11,437.40.

Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 3,395.49 crore on Monday, according to exchange data.

Brent crude futures, the global oil benchmark, rose 1.08 per cent to USD 45.77 per barrel.