Rupee Declines 18 Paise To Close At 82.22 Against US Dollar
The rupee depreciated 18 paise to close at 82.22 (provisional) against the US currency on Wednesday, pressured by a strong greenback overseas and a negative trend in domestic equities.
Forex traders said foreign fund outflows and firm crude oil prices also dragged the local unit down.
At the interbank foreign exchange, the domestic unit opened at 82.10 against the dollar and finally ended the session at 82.22 (provisional), down 18 paise from its previous close.
During the day, the rupee witnessed a high of 82.07 and a low of 82.25 against the greenback.
On Tuesday, the rupee settled at 82.04 against the dollar.
The rupee depreciated on Wednesday on weak domestic equities and a strong US dollar. FII outflows over the past two sessions also weighed on the local unit, said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.
European markets too traded in the red, with UK markets as the biggest loser amid elevated inflation. The dollar gained on rising expectations of further tightening of monetary policy by the US Federal Reserve in its next FOMC meeting in May.
Most of the Fed officials are advocating for a 25-bps rate hike in their respective speeches.
“We expect the Indian rupee to trade with a negative bias on risk aversion in global markets and a recovery in the greenback. If we see further FII outflows, it may put downside pressure on the rupee. However, softening of crude oil prices may prevent a sharp fall in the domestic currency,” Choudhary added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.33 per cent to 102.08.
Brent crude futures, the global oil benchmark, declined 1.69 per cent to USD 83.34 per barrel.
On the domestic equity market front, the 30-share BSE Sensex closed 159.21 points or 0.27 per cent lower at 59,567.80 points. The broader NSE Nifty declined 41.40 points or 0.23 per cent to 17,618.75 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Tuesday as they offloaded shares worth Rs 810.60 crore, according to exchange data.