The rupee declined by 26 paise to 86.57 against the US dollar in the early trading session on Tuesday, attributed to continuous dollar demand from oil importers and a lack of risk appetite. Forex analysts mentioned that the rupee is facing downward pressure due to ongoing foreign fund outflows and the prevailing strength of the US dollar in the global market.
Furthermore, market sentiments and the trajectory of the rupee are expected to be influenced by the upcoming Union Budget, with hopes high for favorable measures aimed at attracting foreign investments. Starting at 86.53, the rupee further slipped to 86.57 against the US dollar in the interbank foreign exchange, marking a decrease of 26 paise compared to its previous close.
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, noted that risk aversion was dominating the market sentiment, leading to a decline in the Indian rupee. He added, “FPIs continued to sell Indian equities while buying dollars, pushing the rupee from 86.20 to 86.45. It is likely that this trend will persist, with the rupee remaining within the range of 86.20/50.”
Meanwhile, the dollar index, measuring the strength of the US dollar against a basket of six major currencies, stood at 107.86, up by 0.49%. In the commodity market, Brent crude oil prices experienced a slight increase, trading at $77.13 per barrel in futures trade. Bhansali explained, “Brent oil prices stabilized after facing losses last week due to concerns over increased supplies and uncertainties surrounding long-term demand.”
On the domestic front, the BSE Sensex was up by 332.00 points or 0.44% at 75,698.17, while the Nifty showed a gain of 63.65 points or 0.28% at 22,892.80 in the morning trade. Foreign Institutional Investors (FIIs) were net sellers in the capital markets, offloading ₹5,015.46 crore on Monday, according to exchange data.
Overall, the rupee’s depreciation against the US dollar reflects the prevailing market conditions and ongoing factors influencing the currency’s performance.
