On Monday, the Indian rupee struck a new record low, and it lost 10 paise to close at 92.40 (possibly provisional) against the US dollar due to the increasing crude oil prices, and the ongoing inflows of foreign funds against the country against the global geopolitical tensions. The local currency opened in 92.44 and also dropped to intra-day low of 92.47 and ended of the session at a slight higher of 92.40 as per forex traders.
Although depreciated, the drop in the rupee was a bit cushioned by a robust recovery in domestic equities which was driven by the expectation of reopening of the Strait of Hormuz. The benchmark Sensex gained 938.93 points or 1.26 to 75502.85 and the Nifty gained 257.70 points or 1.11 to 23408.80.
International crude oil benchmark Brent increased by 1.46 at USD 104.69 per barrel, which exerted a strain on the currency. In the meantime, the dollar index or a gauge of the greenback relative to a basket of six leading currencies dropped by 0.13 percent to 99.97.
Government statistics indicated that India had narrowed to a trade deficit of USD 27.1 billion in February, exports declined marginally by 0.81 percent to USD 36.61 billion and imports increased by 24.11 percent to USD 63.71 billion in comparison with the last year. Foreign institutional investors persistently sold Indian equities netting out of 10,716.64 crore on Friday.
According to traders, the rupee is under pressure due to the global uncertainties but the domestic market gains are giving it partial support.
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