Mumbai, Feb 2 (PTI) The rupee gained 37 paise to 91.56 against the US dollar in early trade 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 for the rupee, the budget offered reassurance, not relief. Moreover, the government's high borrowing plan is likely to weigh on investor sentiments.

The government is likely to borrow Rs 17.2 lakh crore in the next financial year to fund its fiscal deficit projected at 4.3 per cent of the GDP.

At the interbank foreign exchange market, the rupee opened at 91.95 against the US dollar, then gained some ground to 91.56, registering a gain of 37 paise over its previous close.

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

In the initial trade, it also touched 91.95 against the American currency.

"Union Budget 2026 did not arrive with fireworks. Instead, it stayed firmly on the path of continuity — focusing on growth, stability, and fiscal discipline. Short-term pressure may persist, but the broader message of fiscal credibility and growth continuity keeps medium-term prospects constructive," CR Forex Advisors MD Amit Pabari said.

Pabari further said "with USD/INR hovering just below 92.00, this level now stands as the key near-term pivot. A sustained break above it could open the path toward 92.20–92.50.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.10 per cent higher at 97.08.

Brent crude, the global oil benchmark, was trading 4.24 per cent lower at USD 66.38 per barrel in futures trade, as US and Iran were talking about avoiding US strikes on the Iranian soil.

The oil prices had touched USD 72 per barrel after traders expected a US strike on Iran during the weekend.

On the domestic equity market front, Sensex climbed 302 points to 81,024.94, while Nifty was trading up 59.25 points to 24,884.70.

On Sunday, equity markets reacted negatively to the Union Budget as higher securities transaction tax on derivatives and changes to buyback taxation increased costs and weighed on sentiment.

Foreign Institutional Investors offloaded equities worth Rs 588.34 crore on Sunday, according to exchange data. PTI DRR ANU ANU

Rupee strengthens to 91.56 as budget signals fiscal credibility amid large government borrowing and tax changes. The Budget projects government borrowing of Rs 17.2 lakh crore to fund a fiscal deficit of 4.3% of GDP, signalling fiscal discipline while potentially pressuring investor sentiment. Early trading saw the rupee strengthen as crude prices eased, but analysts identified 92.00 as a near term pivot for USD/INR. Concurrently, higher securities transaction tax on derivatives and changes to buyback taxation raised market costs, contributing to equity weakness and foreign institutional selling.