Continuing its trend, the Indian rupee faced a second consecutive day of decline as it slipped by 8 paise to reach 83.21 against the US dollar during early trading on Tuesday. This depreciation can be attributed to factors that collectively affected the currency’s performance.
The rupee experienced pressure due to selling by foreign equity investors exacerbating its woes. Additionally, the strength of the US dollar remained firm. Contributed further to the rupee devaluation. Moreover, the subdued sentiment in the equity market and high crude oil prices, which remained above USD 92 per barrel, added downward pressure on the Indian rupee, according to forex traders.
At the foreign exchange market, the rupee opened at 83.19 against the US dollar. Reached a low of 83.23 before settling at 83.21. This marked a decrease of 8 paise from its closing rate. The previous day also saw a drop of 19 paise for the rupee, concluding at a rate of 83.13 against the dollar.
Market analysts attribute this depreciation of the rupee to a strengthening US dollar driven by increased demand for currency from importers towards month end and rising US Treasury yields. At the time, the dollar index, which gauges the power of the US dollar against a collection of six currencies, slightly increased by 0.05 percent to reach 106.07.