On Friday, the rupee further depreciated, falling 15 paise to close at 89.86 (provisional) against the US dollar due to a negative trend in domestic equity markets and due to continued outflow of foreign funds.
Participants in the forex market indicated that the local currency was put under pressure because of a number of factors, which include a turnaround in the price of crude oil, high demand for the dollar by importers, and a risk-off mood in the international markets as the world awaited international trade contracts. All these dishearten investor confidence and curtailed any recovery in the rupee.
The rupee began trading at the market at the interbank foreign exchange market at 89.84 against the US dollar and soon fell below. It had reached an intra-day low of 89.94 in the process, indicating that it was down 23 paise at its last close.
Meanwhile, the dollar index that gauges the strength of the US currency against the six major world currencies was buying and selling 0.10 per cent higher at 98.07 and further straining the emerging market currencies, including that of the rupee.
Prices of crude oil also crept up with Brent crude, which is the world standard, increasing 0.26 per cent to USD 62.41 per barrel in the futures market. An increase in oil prices will have the effect of putting pressure on the rupee since India is a big importer of crude.
Domestically in the equity market, markets were in the red. The BSE Sensex has fallen by 367.25 points to close at 85,041.45, whereas the NSE Nifty has gone down by 99.80 points to close at 26,042.30.
To make matters worse, the foreign institutional investors (FIIs) went on to sell Indian stocks and sold stocks worth 1721.26 crore as of Wednesday, as per the exchange data. This was a continued outflow of capital, and this also continued to put pressure on the rupee in the session.
Join our whatsapp group for Latest updates
Click Here for Chhattisgarh News
Click Here for Entertainment News