Rupee Starts On A Weak Note, Slides 10 Paise To 94.66 Against US Dollar In Early Trade

Mumbai witnessed the Indian rupee starting the trading day on a weak note on Tuesday, September 8, as it slipped 10 paise to 94.66 against the US dollar. This decline came in the backdrop of rising crude oil prices and heightened tensions between the United States and Iran, which dampened investor sentiment. The rupee opened at 94.49 at the interbank foreign exchange market, only to depreciate to 94.66.

Earlier in the week, the rupee had fallen 13 paise against the American currency. The Reserve Bank of India's (RBI) intervention played a crucial role in preventing a sharper depreciation of the rupee, despite the downward pressure from high crude prices and strong foreign currency inflows through special schemes. Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, opined that the RBI's actions have been instrumental in containing the rupee's losses.

Forex traders anticipate the USD-INR exchange rate to remain within the 94.00-94.75 band as the RBI continues to sell dollars. Investors are eagerly awaiting the release of US and India's inflation data, as well as the Federal Reserve's FOMC meeting on September 16, for further insights. Meanwhile, Brent crude prices surged above $97, reaching $97.61 per barrel, propelled by escalating US-Iran tensions and fears of potential disruptions in oil shipments through the Strait of Hormuz.

The rupee managed to find its footing and gained 14 paise, settling at 94.59 against the dollar, while the US dollar index slipped 0.37% to 98.80. The Indian equity markets also experienced a sharp decline, with the Sensex falling 382.25 points to 75,750.56 and the Nifty dropping 97.80 points to 23,681.80 in early trade. Foreign institutional investors were net buyers of Indian equities on Monday, acquiring shares worth Rs 280.13 crore, as per exchange data.