On Monday, the rupee slipped by 14 paise to 86.30 (provisional) to the US dollar in a weak showing buoyed by the longstanding demand of the dollar by the oil importers of the country and a positive trend in the greenback across the world.
Forex traders observed that having touched the vital 86 mark, the rupee continued its plunging trend due to dollar advance decisiveness and import-based outflows. At the interbank foreign exchange market, the rupee was initially weaker at opening at 86.27 rupees per dollar, and it later reached a high of 86.19. It subsequently dropped to an intraday low of 86.36 and then ended at 86.30 down 14 paise as compared to its last close.
Closing on Friday, the local currency ended 4 paise lower to trade at 86.16 per dollar. In the meantime, the dollar index that tracks the performance of greenback against the composite indexes of six major currencies dropped 0.22 per cent to 98.26.
The global oil rate, Brent crude, which is the price benchmark, also recorded a minor drop of 0.48 per cent to close at USD 68.95 per barrel in the futures market. Domestic equity markets rose despite a weak rupee pushed up by 442.61 points or 0.54 per cent to close at 82,200.34. The wider NSE Nifty gained 122.30 points or 0.49 per cent to close at 25,090.70.
The buying spree of foreign institutional investors (FIIs) also remained on Friday, who bought equities to the tune of Rs 374.74 crore on a net basis, as per the provisional exchange data.
Market analysts are proposing that the weakness of the rupee might continue in the short to near term on the back of continuous demand for the dollar by importers, especially oil refiners, with the concurrent risk-off environment witnessed by geopolitical tensions and prospects of additional resilience shown by the US economy aiding the dollar.
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