he rupee depreciated by 36 paise to close at a week’s low 87.31 against the US dollar on Monday due to volatile crude oil prices amid tariff uncertainties worldwide and unabated outflow of foreign funds.
A weaker American currency failed to support the local unit as a sell-off in the domestic equity market hit the sentiment adversely, forex traders said.
At the interbank foreign exchange, the rupee opened weak at 87.24 and touched the day’s low of 87.36 amid intense volatility. The unit touched an intraday high of 87.16 before ending the session at 87.31 against the greenback, registering a loss of 36 paise from its previous closing level.
Earlier, the domestic currency had recorded a steep single-day loss of 47 paise against the dollar on February 25.
On Friday, the rupee appreciated 17 paise to close at 86.95 against the US dollar. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.15 per cent at 103.65.
Brent crude, the global oil benchmark, rose 0.28 per cent to $70.56 per barrel in futures trade. Domestic equity markets closed lower with the 30-share BSE Sensex falling by 217.41 points, or 0.29 per cent, to 74,115.17, and the Nifty losing 92.20 points, or 0.41 per cent, to close at 22,460.30. Foreign institutional investors (FIIs) offloaded equities worth Rs 485.41crore on a net basis on Monday, according to exchange data.
The latest RBI data released on Friday showed the country’s forex reserves dropped by $1.781 billion to $ 638.698 billion in the week ended February 28. The overall forex kitty had jumped by $ 4.758 billion to $ 640.479 billion in the previous reporting week.
On the global macroeconomic froth, the US Labour Department data on Friday showed increased hiring activity in February though the unemployment rate rose slightly to 4.1 per cent. Economists say the outlook remains cloudy with President Donald threatening a trade war and purging the federal workforce.
