The rupee saw a decline of 38 paise, marking its largest drop in over a month, to settle at 87.33 (provisional) against the US dollar on Monday. This was a result of volatile crude oil prices, tariff uncertainties globally, and continuous outflow of foreign funds.
Despite a weaker US dollar, the local unit couldn’t gain support as a sell-off in the domestic equity market negatively impacted sentiment, according to forex traders. The rupee opened the day at 87.24 and reached a low of 87.36 amidst significant volatility. It touched a high of 87.16 before ending the session at 87.33 (provisional), down by 38 paise from the previous close.
Earlier in February, the rupee had experienced a sharp single-day decline of 39 paise against the dollar. On Friday, it had strengthened by 17 paise to close at 86.95 against the US dollar.
Meanwhile, the dollar index, which measures the greenback against six major currencies, was down by 0.15% at 103.65. Brent crude, the global oil benchmark, rose by 0.28% to $70.56 per barrel in futures trade.
Domestic equity markets closed in the red, with the BSE Sensex dropping by 217.41 points to 74,115.17, and the Nifty losing 92.20 points to close at 22,460.30. Foreign institutional investors (FIIs) sold equities worth ₹2,035.10 crore on a net basis on Friday.
Data released by the RBI on Friday indicated a decrease in the country’s forex reserves by $1.781 billion to $638.698 billion for the week ended February 28. In the previous reporting week, the forex kitty had increased by $4.758 billion to $640.479 billion.
On the global front, US Labour Department data revealed increased hiring activity in February, though the unemployment rate inched up to 4.1%. The economic outlook remains uncertain due to the threat of a trade war from President Donald Trump and ongoing federal workforce purges.
