Indian rupee settled lower by 8 paise at 85.23 (provisional) versus the US dollar on Tuesday, ending a five-session winning run. It traded in a narrow range the whole day as gains from strong domestic equities, as well as fund inflows, were wiped away by dollar short covering and higher global crude oil prices.
The rupee opened at 85.11 at the interbank foreign exchange market and hit an intra-day high at 85.07, a low at 85.23, and closed at its weakest level of the day of 85.23. The foreign exchange rate against the rupee had gone up by 23 paise on Monday and closed at 85.15.
Noting that strong foreign institutional investors’ (FIIs) buying continued to support the currency but dampened investor sentiment due to a rebound in Brent crude prices and concerns about global economic uncertainty, Forex traders tracked the rupee. The international oil benchmark Brent crude surged 1.52 percent to USD 67.27 a barrel in futures trade, which bears heavily on India’s import bill and thus the rupee.
Lingering fears about potential US tariffs as well as Fed tightening of the monetary tap also stoked global uncertainty, which saw investors shoring up their US dollar defences. The greenback rose 0.08% to 98.35 in its dollar index, which tracks the currency against a basket of six major currencies.
Equity markets were upbeat on the domestic front as well. The 30-share BSE Sensex gained 187.09 points (0.24%) to end at 79,595.59, and the Nifty rose 41.70 points (0.17%) to settle at 24,167.25. On Monday, FIIs bought Indian equities worth Rs 1,970.17 crore, which acted as a cushion to the rupee’s fall, exchange data showed.
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