The Indian rupee on Tuesday gave up its initial gains and ended on Tuesday 4 pais down at 89.20 (tentative) against the US dollar as the market mood in the domestic market and the continued disbursement of foreign funds continued to harm the currency. Although this was aided by a fact that the global price of crude oil was on the decline, the rupee could not hold itself together as the risk-off indicators continued.
In interbank foreign exchange market, rupee opened at a stronger position of 89.02 but very quickly lost grip to reach an intra-day position of 89.27 against greenback. It finally closed at 89.20 as compared to Monday, which was 89.16. On Monday, the rupee had made a commendable recovery of 50 paise as it had fallen to an all time low of 89.66 on Friday.
The forex analysts observed that the decision to reduce the price of crude oil contributed towards curbing the downfall of the rupee. The world standard that is called Brent crude fell 0.49 percent to USD 63.06 per barrel in a futures trade that is a reprieve to India, which is a major importer of oil. Nevertheless, the further outflow of the foreign institutional investors (FIIs) provided a long-lasting negative pressure. Data on exchange revealed that on Monday, FIIs sold equities worth 4 175 crore.
The dollar index in the world, which measures the greenback against the six major currencies, fell marginally by a percentage of 0.06 to 100.01 indicating a slight moderation in the strength of the dollar. Notwithstanding, the performance of the rupee was low owing to local forces.
The pressure was added by the Indian equity markets. The Sensex plummeted by 313.70 or 0.37 percent to close at 84,587.01 whereas the Nifty fell by 75.55 or 0.29 percent to close at 25,884.80. Analysts opined that poor investor spirit coupled with FII selling left the currency with a bad background.
Generally, the currencies of the rupee were the representation of global weakness in the dollar and the Indian market pressures.
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