The Indian rupee. Photo: AFP
The Comptroller General of Accounts' data for April 2020 show that the federal government's share of tax collection during April was 167 billion rupees (US$2.21 billion) compared with 553 billion rupees in the previous year. Photo: AFP

There was some respite for the beleaguered Indian rupee on Friday, after the softening of US dollar and easing of crude-oil prices. For the first time since October 1, the value of the Indian currency went below 73 against US dollar, reports. It was trading stronger by 48 paise at 72.97 per dollar versus the previous close of 73.45 in early trade.

Crude-oil prices fell to the lowest level since April, as the output from the world’s major oil producers increased, while global demand is seen weakening.

The rising rupee had a favorable impact on the Indian stock markets, as the benchmark equity indices rallied more than 1% in morning trade on Friday. Favorable US and Asian cues following a softening of US-China trade tension also boosted investor sentiment.

The Bombay Stock Exchange Sensex rose 604.54 points or 1.76% to 35,036.51, at 12:45pm, while the National Stock Exchange’s Nifty jumped 183.85 points, or 1.77%, to 10,564.30 at 12:50pm.

The hardening of the dollar due to rising interest rates in the US and rising oil prices had caused India’s oil-import bill to shoot up and the current-account deficit had widened.

In addition, there has been a sharp increase in capital outflows. In the first six months of 2018, overseas investors pulled out nearly 480 billion rupees from Indian capital markets, the steepest outflow in a decade. The primary reasons were high oil prices and worries over the US-China trade war.

The rupee has fallen nearly 16% this year, making it the worst-performing Asian currency.