Rupee falls 7 paise to close at 95.68 against US dollar
At the interbank foreign exchange, the rupee opened at 95.68 against the greenback and traded in a range of 95.64-95.69 during the session
On Tuesday, the Indian rupee depreciated by 7 paise, closing at 95.68 against the US dollar, according to provisional figures. This decline was attributed to several factors, including high crude oil prices and ongoing geopolitical tensions in West Asia. Forex traders noted that the USD/INR pair was expected to exhibit a slight negative bias, influenced by the lack of progress in the US-Iran deal, rising crude oil prices, and overall dollar strength.
The rupee opened at 95.68 at the interbank foreign exchange and fluctuated within a range of 95.64-95.69 throughout the trading session, ultimately settling at 95.68, a decrease of 7 paise from its previous close. On Monday, the rupee had depreciated by 19 paise, closing at 95.61 against the US dollar. With Brent crude prices surpassing $90 per barrel and the reopening of the Strait of Hormuz remaining uncertain, oil prices are anticipated to remain a critical factor affecting the rupee, inflation, and foreign inflows.
Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services Ltd., highlighted that weak global cues and Foreign Institutional Investor (FII) selling contributed to the negative sentiment, with FIIs selling equities worth ₹2,535 crore on Monday, marking the highest selling activity in three weeks. Furthermore, the US 10-year Treasury yield remained elevated.
The dollar index, which measures the greenback's strength against a basket of six currencies, was trading at 99.60, down 0.04 percent. Brent crude, the global oil benchmark, experienced a 0.01 percent increase, trading at $90.88 per barrel. Khemka suggested that despite elevated crude prices, geopolitical uncertainties, and FII selling, resilient domestic fundamentals and ongoing policy support could offer a constructive medium-term outlook for the rupee.
In the domestic equity market, the Sensex declined by 492.70 points to reach 77,235.46, while the Nifty dropped by 132.75 points to close at 24,154.90. Net outflows from foreign institutional investors amounted to ₹2,535.10 crore on Monday, according to exchange data.
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