Rupee falls 7 paise to close at 94.50 against US dollar

The Indian rupee experienced a decline of 7 paise against the US dollar, closing at 94.50 (provisional) on Monday. This fall was attributed to surging crude oil prices and global headwinds, despite support from strong foreign currency non-resident (FCNR) dollar inflows. Forex traders noted modest gains for the rupee in initial trade due to foreign inflows, but a negative outlook from domestic equities and rising crude oil prices impacted investor sentiment.

The interbank foreign exchange market saw the rupee open at 94.40 against the US dollar, reaching an intraday high of 94.38 and a low of 94.50 throughout the day. At the end of the trading day, the rupee settled at 94.50, marking a 7 paise decrease from the previous close. On Friday, the rupee had settled at 94.43 against the US dollar, gaining 8 paise.

Anuj Choudhary, a Research Analyst at Mirae Asset ShareKhan, mentioned that the rupee might trade with a positive bias due to optimism over foreign inflows and a weak dollar. Iran reported that the deal with Oman concerning the Strait of Hormuz was nearing completion, potentially easing crude oil prices and further supporting the rupee.

However, tensions between the US and Iran could still pressure the rupee at higher levels. Investors are now focusing on US and Indian inflation data. Meanwhile, the dollar index, which measures the greenback's strength against a basket of six currencies, was at 98.90, down 0.27 percent. Brent crude oil, the global benchmark, rose 0.58 percent to $96.84 per barrel in futures trade.

The domestic equities market saw the Sensex drop 382.62 points to 76,132.81, while the Nifty fell 118.55 points to 23,779.15. On a net basis, foreign institutional investors (FIIs) sold equities worth ₹3,111.94 crore on Friday. According to the Reserve Bank of India (RBI), India's forex reserves surged $11.475 billion to an all-time high of $740.803 billion during the week ended August 28.