On Wednesday, the value of the Indian rupee fell by 3 paise and closed at 83.96 (provisional) to the dollar due to increased demand for the US currency that receded from imports, especially oil. The depreciation was seen in the INR vs USD rate, despite positives like domestic equities’ up-trend, foreign fund inflows, and a slump in the price of crude oil, which temporarily cushioned the rupee’s further depreciation.
In the interbank forex market- the rupee opened at 83.94 against the dollar and touched its intra-day low at 83.97. At the close of trading in the local currency, the foreign exchange stood at 83.96, down by 3 paise from its previous close.
The rupee was under pressure in the INR vs USD rate as the dollar index, which gauges the greenback’s strength against a basket of half-a-dozen major currencies, climbed. The dollar index was trading 0.36% higher at 100.91 due to the depreciation in the rupee against the dollar, where the dollar applied pressure on emerging market currencies.
However, on the international scale, there was a different tune being played as the Brent crude, which is the international benchmark for oil, dipped by 0.93% from the average price of USD 78.81 per barrel. This decline in crude prices offered some reprieve to the rupee as lower oil prices eased the burden on the import bill for oil-importing countries like India, thus reducing the demand for the dollar.
In the domestic equity market news, the Sensex closed the day higher by 73.80 points, or 0.09%, closing at 81,785.56 points. Likewise, the Nifty went up by 34.60 points, or 0.14 %, by the end and closing the value at 25,052.35 points, which has an inclination towards the positive mood in the stock markets.
FIIs remained net buyers for the tenth consecutive week and invested in Indian equities to Rs 1,503.76 crore on Tuesday, as per data on stock exchanges. Foreign funds flowing into the country’s market also offered some support to the rupee. Otherwise, demand for dollars from importers remained firm.
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