The rupee slipped to 19 paise on Tuesday to close at 86.23 (provisional) against the US dollar, as a combination of factors influenced worldwide, as well as domestic factors, to pressure the sentiment of the investors. The reason behind the fall was mainly cited to be the increasing prices of international crude oil, heavy geopolitical tensions in the Middle East, as well as increased US dollar figures.
The opening level of the domestic currency at the interbank foreign exchange market was 85.96, and it fluctuated within a tight range of 85.96 to 86.28 at the end of the day. It stabilised at 86.23 as compared to the previous close of 86.04 on Monday.
The analysts in the Forex betting traced the strengthening global crude oil prices as a major straining point on the rupee. The global benchmark, the Brent crude, increased by 1.60 per cent to 74.40 per barrel as fears that the Israel-Iran conflict may affect the oil supplies in the strategic Strait of Hormuz escalated. Any disruption of this nature will be a direct threat to India’s oil import bill and the rest of the macroeconomic stability.
Worsening the plight of the rupee was the uptrend of the US dollar, whose index rose by 0.20 per cent to 98.19. The appreciation of the greenback was still putting pressure on the emerging market currencies, including the rupee.
Equity markets on the local front with low signals also worsened the mood. BSE Sensex fell by 212.85 points to close at 81,583.30, and NSE Nifty weakened by 93.10 points to 24,853.40. The pharma, metals, and PSU bank stocks were identified as the places of sectoral pressure.
FIIs remained on a selling spree as equity worth 2,539.42 crore in terms of value changed hands in their sale. In the meantime, the rate of unemployment rose marginally to 5.6 per cent in May as compared to 5.1 per cent in April, and was measured by the Ministry of Statistics and Programme Implementation (MoSPI) based on seasonal changes in the labour market.
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