Still affected by the increasing prices of crude oil, stronger American currency, and still being affected by the foreign fund outflow, the Indian rupee fell by 4 paise to close at 90.21 (provisional) against the US dollar on Tuesday. Traders of the currency said the domestic unit was burdened by relentless global headwinds and poor risk moods all through the session.
Even at the interbank foreign exchange market, rupee began the day at a low position of 90.24 relative to the dollar and traded within a small margin through the day. It reached a low of 90.30 intraday and then upsurged to end at 90.21, which is a loss of 4 paise over the close of the previous session. By Monday, the rupee had been slightly up by 1 paisa at 90.17 against the US currency.
The dollar index that gauges the performance of the greenback on a six-major currency index was being traded 0.07 per cent above, at 98.69, indicating the continued solid performance of the US dollar amid economic uncertainties in the world economy.
The pressure on the rupee was also caused by the prices of crude oil. The world standard, which is the Brent crude, increased by 1.47 per cent to sell at 64.80 a barrel in the futures trade. The increased oil prices are likely to affect the rupee adversely because India is a huge consumer of the crude oil.
In domestic equity, the benchmark indices fell and it reflected the low mood in currency markets. BSE Sensex 30 dropped by 250.48 points or 0.30 per cent to close at 83, 627.69. Equally, the wider NSE Nifty was down 57.95 points or 0.22 per cent to close at 25,732.30.
The foreign institutional investors (FIIs) remained to be net sellers in the equity market. Depending on exchange data, offloading by the FIIs hit 3,638.40 crore shares on Monday, further dragging on investor mood and pressuring the rupee.
According to the participants in the market, the position of the domestic currency is expected to be volatile in the short term, following the global signals, crude oil, and capital flows.
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