Rupee rises 23 paise to close at 87.36 against US dollar

New Delhi, Aug 18 (PTI) The rupee appreciated 23 paise to close at 87.36 (provisional) against the US dollar on Monday, supported by strong domestic equities.

Forex traders said the Indian rupee traded on the positive territory on the GST reforms that Prime Minister Narendra Modi recommended in his August 15 address to the nation.

Forex traders said the uncertainty over trade tariffs issue between India and the US is likely to keep market participants cautious.

At the interbank foreign exchange market, the rupee opened at 87.46 against the US dollar, and touched an intraday low of 87.48 and a high of 87.33 and settled at 87.36 (provisional), registering a gain of 23 paise over its previous close.

On Thursday, the rupee settled lower by 12 paise at 87.59 against the US dollar.

Forex and equity markets were closed on Friday on account of Independence Day.

PM Modi on Sunday said the Centre has circulated the draft of the next-generation GST reforms among states and sought their cooperation to implement the proposal before Diwali.

He said the reform in GST would benefit poor and middle-class people, as well as small and big businesses.

The present GST tax rates of nil/zero on essential food items, 5 per cent on daily use products, 12 per cent on standard goods, 18 per cent on electronics and services and 28 per cent on luxury and sin goods will be replaced by two tax slabs of 5 per cent and 18 per cent, plus a special 40 per cent top bracket for 5-7 demerit goods.

The proposed two-slab regime, if approved by the GST Council, will replace the current four slabs in the Goods and Services Tax (GST) regime, doing away with the 12 per cent and 28 per cent slabs.

Meanwhile, Brent crude prices rose 0.70 per cent to USD 66.31 per barrel in futures trade.

Investors will monitor Federal Reserve Chair Jerome Powell's comments at Jackson Hole this week for clues on the path of interest rate cuts in its next meeting in September, traders said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.14 per cent to 97.98.

On the domestic equity market front, Sensex jumped 676.09 points to settle at 81,273.75, while the Nifty surged 245.65 points to 24,876.95.

Foreign Institutional Investors offloaded equities worth Rs 1,926.76 crore on Thursday, according to exchange data.

On the domestic macroeconomic front, S&P on Thursday upgraded India's sovereign credit rating to 'BBB' with a stable outlook after over 18 years, citing robust economic growth, political commitment for fiscal consolidation and 'conducive' monetary policy to check inflation.

The impact of US tariffs on the Indian economy will be "manageable", S&P said, adding that a 50 per cent tariff on US exports (if imposed) will not pose a "material drag" on growth. PTI DRR TRB