The rupee closed the day on Wednesday near its all-time closing low, standing at 91.96 (provisional) against the U.S. dollar due to the continued foreign fund-related stresses on the currency and a risk-averse world market.
The domestic currency started at 91.95 to the greenback in the international interbank foreign exchange market and first improved to reach a high of 91.82. The gains however could not last long with the selling pressure coming in to affect the rupee to intraday lows of 92 before regaining some ground to end almost at the weakest.
Players in the market have explained the underperformance of the rupee by the uncertainty that has been experienced in the global markets as well as the hesitation of the investors. Though the U.S. dollar had some indications of weakening this was not sufficient to support the domestic currency on a long-term basis. The dollar index that determines the ability of the greenback as compared to a basket of six big currencies was trading at 96.37, a fall of 0.07%.
This was somewhat relieved by the crude oil prices that are a major factor to the Indian import-dependent economy. The global oil standard known as the Brent crude fell by 1.83 per cent at 69.64 a barrel in futures trade, which alleviated fears of increased importation prices.
Domestically, on the equity side, the benchmark indices were in the positive. The BSE Sensex increased by 221.69 points to close at 82563.37 with the NSE Nifty increasing by 76.15 points and closing at 25418.90, with the help of the buying in certain heavyweight stocks.
To some extent, foreign institutional investors (FIIs) favored equities and on Wednesday, they bought shares valued at ₹480.26 crore as per the exchange data. Nonetheless, observers warned that the global markets volatility might persist in the near future and put a strain on the rupee.
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