Forex traders said the rupee is trading lower on strong dollar and sustained foreign fund outflows over the past few days.
Published Date – 10:40 AM, Wed – 6 September 23
Mumbai: The rupee depreciated 5 paise to 83.09 against the US dollar in early trade on Wednesday as elevated crude oil prices and strength of the American currency weighed on investor sentiments.
Forex traders said the rupee is trading lower on strong dollar and sustained foreign fund outflows over the past few days.
At the interbank foreign exchange, the domestic unit opened at 83.08, then touched 83.09, registering a decline of 5 paise over its last close.
On Tuesday, the rupee plunged by 33 paise to close at 83.04 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell marginally by 0.09 per cent to 104.71.
Brent crude futures, the global oil benchmark, rose 0.07 per cent to USD 90.10 per barrel.
Saudi Arabia and Russia shook the oil world when they extended production cuts to December taking Brent oil to USD 90.19 per barrel, Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP said.
This spelled tighter supplies in the next four months as markets expected a supply cut only up to October. Oil is the biggest import for India and any spike in oil price will widen the Current Account Deficit, Bhansali said.
The rupee was sold as oil prices spiked and RBI allowed a move above 83 as demand from oil companies kept the US dollar higher, Bhansali said.
In the domestic equity market, the 30-share BSE Sensex was trading 76.15 points or 0.12 per cent higher at 65,856.41. The broader NSE Nifty rose 18.35 points or 0.09 per cent to 19,593.25.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Tuesday as they offloaded shares worth Rs 1,725.11 crore, according to exchange data.
