Rupee Closes Slightly Lower Against US Dollar

The Indian rupee fluctuated within a narrow range before ultimately closing 1 paisa lower at 86.62 (provisional) against the US dollar on Friday. This decline came amid significant foreign fund outflows and a downturn in the domestic equity markets, which negatively impacted investor sentiment.

Forex traders noted that a robust American dollar, coupled with rising crude oil prices, further exerted pressure on the local currency.

During intra-day trading on the interbank foreign exchange market, the rupee opened at 86.60 and remained range-bound within the limits of 86.55 to 86.62 before settling at 86.62, marking a decline of 1 paisa from its previous closing level.

On the preceding Thursday, the rupee had depreciated 21 paisa to close at 86.61 against the dollar. However, in the two sessions prior on Tuesday and Wednesday, the rupee had gained 30 paisa after hitting an all-time low of 86.70.

Anuj Choudhary, a Research Analyst at Mirae Asset Sharekhan, stated that the rupee's decline could be attributed to negative market sentiments and soaring crude oil prices. He indicated that demand from importers might continue to put pressure on the rupee while suggesting that potential interventions by the Reserve Bank of India (RBI), through selling dollars, could support the rupee at lower levels.

Choudhary forecasted that the USD-INR spot price would likely trade within the range of 86.55 to 86.95. Meanwhile, the dollar index, measuring the greenback's strength against a basket of six currencies, was trading 0.09% higher at 108.91. Additionally, Brent crude, the global oil benchmark, experienced a 0.36% rise, reaching USD 81.58 per barrel in futures trading.

In the domestic equity market, the 30-share BSE Sensex saw a decline of 423.49 points, or 0.55%, closing at 76,619.33 points. Similarly, the Nifty index dropped 108.60 points, or 0.47%, landing at 23,203.20 points. Foreign institutional investors further added to the selling pressure, offloading equities worth Rs 4,341.95 crore on Thursday.

rupee, dollar, equity