Rupee falls 28 paise to close at 96.03 against US dollar

On Monday, the Indian rupee depreciated 28 paise to close at 96.03 against the US dollar, according to provisional figures. This decline occurred amid risk-off sentiments in global markets following the US's rejection of Iran's deal proposal, which dampened hopes of reopening the Strait of Hormuz. Forex traders noted that global risk sentiments deteriorated as tensions between the US and Iran persisted, leading to a fall in risk assets and a surge in crude oil prices.

The rupee opened lower at 95.89 against the American currency at the interbank foreign exchange market and continued its downward trend to close at 96.03, marking a 28 paise decline from its previous close. On Friday, the rupee had appreciated 24 paise to 95.75 against the US dollar. Anuj Choudhary, a Research Analyst at Mirae Asset Sharekhan, explained that the rupee is likely to trade with a negative bias due to deteriorating global risk sentiments and the continued stalemate between the US and Iran.

Falling risk assets and rising crude oil prices may further pressure the rupee. However, RBI intervention could potentially support the rupee at lower levels, according to Choudhary. The dollar index, which measures the greenback's strength against a basket of six currencies, rose 0.16 percent to 101.12, while Brent crude futures increased by 3.57 percent to USD 108.04 per barrel.

In the domestic equity market, the Sensex fell 1,124.02 points to 72,771.72, and the Nifty declined 360.25 points to 22,780.25. Foreign Institutional Investors (FIIs) sold equities worth Rs 3,693.93 crore on a net basis on Friday. India's forex reserves decreased by USD 14.881 billion to USD 765.901 billion during the week ended September 18 due to a decline in foreign currency assets, as reported by the RBI on Friday.