Rupee falls 8 paise to 95.25 against US dollar in early trade

The Indian rupee slipped 8 paise to 95.25 against the US dollar in early trading on Monday, impacted by a stronger greenback and a surge in global crude oil prices. However, foreign institutional investors' inflows and a rise in the nation's forex reserves helped mitigate a sharper decline in the local currency, according to forex traders.

The rupee opened at 95.18 at the interbank foreign exchange before declining to 95.25, 8 paise lower than its previous close. It ended the previous trading day at 95.17, marking a 5 paise increase over Friday's rate. Throughout the week, the USD/INR stayed within a tight range of 95.20-95.30, with the rupee concluding the session marginally stronger.

Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, noted that strong forex reserves instilled confidence and restrained dollar demand pressure. Exporters might sell at rates up to 95.40 on Monday, while importers could buy at lower levels. Traders will remain vigilant for developments in the Middle East and the Reserve Bank of India's decisions.

Meanwhile, the dollar index, which measures the dollar's strength against a basket of six currencies, was at 99.70, up 0.17 percent. Brent crude, the global oil benchmark, rose 0.91 percent to $84.31 per barrel in futures trade. On the domestic stock market, the Sensex dipped slightly by 19.38 points to 78,479.79, while the Nifty fell 5.10 points to 24,567.45.

On Friday, foreign institutional investors invested ₹480.24 crore in equities on a net basis, as per exchange data. The RBI data from the week leading up to July 31 revealed that the country's forex reserves surged by $10.512 billion to $692.866 billion.