Rupee falls 2 paise to settle at 9576 against US dollar
The rupee fell 2 paise to close at 95.76 (provisional) against the US dollar on Wednesday as a sharp rise in global crude oil prices amid heightened tensions in West Asia kept markets on edge.
A sharp decline in domestic equity markets put further pressure on the local unit, while RBI intervention and foreign fund inflows lent support, according to forex traders.
At the interbank foreign exchange, the rupee opened at 95.72 and traded in a very narrow range of 95.72-95.76. It eventually settled at 95.76 (provisional), down 2 paise from its
previous close.
The rupee depreciated 13 paise to close at 95.74 against the US dollar on Tuesday. “Rupee has mildly depreciated against the dollar due to higher crude oil prices and strong US bond yields. So long as crude oil prices remain elevated, the rupee will continue to be mildly weak,” V K Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said.
But there is no room for a sharp depreciation since India has adequate forex reserves and the inflows under the FCNR (B) scheme have been much better than expected, he said.
US President Donald Trump said on Tuesday that the US has no talks planned with Iran but insisted the Strait of Hormuz remains “open and operating”, despite limited traffic and a reported strike on a ship exiting the waterway.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 99.85, up 0.04 per cent.
Brent crude, the global oil benchmark, was trading higher by 0.92 per cent at USD 91.86 per barrel in futures trade.
On the domestic equity market front, Sensex settled 325.78 points, or 0.42 per cent, down to 76,909.68 points, while the Nifty skidded 76.60 points, or 0.32 per cent, to close at 24,078.30.
Foreign institutional investors purchased equities worth Rs 1,651.53 crore on a net basis on Tuesday, according to exchange data.
