Rupee Check: Indian currency opens at 90.40 per USD, strengthens by ₹1.11 on Feb 3 on US-India trade deal

The domestic currency recovered strongly as improved sentiment following the India–US trade deal boosted risk appetite.

India and the US agreed on Monday on a trade deal under which Washington will bring down the reciprocal tariff on Indian goods to 18% from the current 25%, US President Donald Trump said on Monday, after a phone conversation with Prime Minister Narendra Modi.

Union Minister Ashwini Vaishnaw on Monday said the India-US trade agreement is a win-win deal that will benefit citizens and industries of both countries.

In a post on X, Vaishnaw, the Union minister for information and broadcasting, said, "A trade deal between the US and India will lead to a brighter future for both countries."

"The India-US trade deal is a win-win deal. Citizens and industries of both countries will benefit greatly from this deal," he said.

Deepak Agrawal, CIO of Debt at Kotak Mutual Fund, said the reduction in tariffs on Indian exports to the US is indeed a welcome move, expected to boost India's economy.

"This development is likely to improve the country's balance of payments (BOP) gap, strengthen the rupee, increase foreign exchange (FX) reserves, and attract foreign institutional investors (FIIs) who had been waiting on the sidelines. Additionally, Indian equities have become more attractive as their valuation premium has narrowed over the past year," Agrawal said.

This positive macroeconomic outlook is also expected to keep interest rates stable.

What the government said on Monday on Rupee

The government, along with the regulator, is carefully watching the rupee, which has slipped below the 90 mark against the US dollar, and may take measures once the situation becomes uncomfortable, Economic Affairs Secretary Anuradha Thakur said on Monday.

"Anything above 90, everyone starts talking about it. Even we start watching it carefully. It is a question of flows, and we are impacted by that," he told PTI in an interview.

However, she said, a depreciating rupee does have a certain value in terms of export competitiveness whenever it happens.

"We are watching together with regulators and other stakeholders. We will see how to handle it if a situation more than uncomfortable happens," she said.

Rupee on Monday

The rupee gained 42 paise to close at 91.51 (provisional) against the US dollar on Monday, a day after the Union Budget 2026-27 was presented, largely as crude oil prices retreated from their elevated levels.

Forex traders said the Reserve Bank of India (RBI) seemed to be defending the 92 per dollar level with a lot of resolve.

On Friday, the rupee hit a record low of 92.02 before ending 6 paise higher at 91.93 against the US dollar.