The Indian rupee strengthened by 40 paise to trade at 85.05 against the US dollar in early Monday trade, supported by a weaker US dollar index and buoyant domestic equity markets.
Forex traders attributed the sharp appreciation to sustained foreign fund inflows and the Reserve Bank of India's recent announcement of a record dividend payout to the government for FY25, which further bolstered sentiment.
Looking ahead, market participants are eyeing the upcoming release of key economic indicators — including industrial and manufacturing output data for April, along with Q1 GDP figures — which are expected to provide a clearer picture of the country's economic momentum, analysts said.