The Indian rupee fell by 8 paise to 83.95 against the US dollar during Tuesday morning’s trade, impacted by rising crude oil prices and weak domestic equity trends.
Forex traders noted that Brent Crude, the global benchmark, was trading above USD 80 per barrel due to ongoing conflicts in the Middle East and increasing geopolitical tensions from Russia’s actions in Ukraine.
At the interbank foreign exchange market, the rupee opened at 83.91 before declining further to 83.95, marking an 8 paise drop from the previous close.
On Monday, the rupee had gained 3 paise, closing at 83.87 against the US dollar.
Asian currencies, which had appreciated on Monday, saw a decline on Tuesday. Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, stated that the rupee opened at 83.91 and is expected to trade within a narrow range of 83.85 to 83.95.
Amit Pabari of CR Forex Advisors highlighted that the Reserve Bank of India (RBI) has been actively intervening in the market, managing inflows to prevent the rupee from reaching its perceived fair value. This strategy has contributed to a nearly USD 5 billion increase in India’s forex reserves, offering protection against potential currency shocks.
Meanwhile, the dollar index, which measures the US dollar’s strength against a basket of six currencies, rose by 0.04 percent to 100.89 points.
In futures trading, Brent crude prices dipped by 0.23 percent to USD 81.24 per barrel, as tensions in the Middle East continued to drive oil prices higher.
In the domestic equity market, the BSE Sensex dropped by 76.99 points (0.09 percent) to 81,621.12 points, while the Nifty declined by 27.75 points (0.11 percent) to 24,982.85 points.
According to exchange data, Foreign Institutional Investors (FIIs) were net buyers on Monday, purchasing shares worth Rs 483.36 crore.
