The Indian rupee experienced a decline of 9 paise to reach 83.27 against the US dollar during early trade on Wednesday. This depreciation was attributed to the negative trajectory observed in the domestic stock market and the persistent rise in crude oil prices. Forex analysts noted that the rupee encountered resistance primarily due to subdued investor sentiment in the local equity market and the strengthening of the American currency in international exchanges.
Opening at 83.22 at the interbank foreign exchange market, the rupee further weakened to settle at 83.27 against the US dollar, marking a decrease of 9 paise from its previous closing rate. Notably, on Tuesday, the rupee had initially surged but eventually closed 5 paise lower at 83.18 against the greenback.
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, highlighted factors influencing the rupee’s performance, stating, “The Indian rupee was sold off on Tuesday as oil and probably the Reserve Bank of India (RBI) bought dollars (about USD 1 billion) to keep rupee appreciation in control before the month-end and the Lok Sabha election results.” Bhansali projected the USD/INR pair to maintain a narrow trading range of 83.15/25 throughout the day.
Simultaneously, the dollar index, indicating the US dollar’s strength against a basket of six currencies, stood at 104.72, marking a 0.11 per cent increase. Additionally, Brent crude futures, the global benchmark for oil, recorded a 0.21 per cent gain, reaching USD 84.40 per barrel.
In the realm of domestic equities, the 30-share BSE Sensex registered a decline of 227.75 points, or 0.30 per cent, trading at 74,942.70 points, while the broader NSE Nifty experienced a fall of 74.30 points, or 0.32 per cent, settling at 22,813.85 points during the initial trading phase.
According to exchange data, Foreign Institutional Investors (FIIs) emerged as net buyers in the capital markets on Tuesday, with purchases amounting to shares worth Rs 65.57 crore.
