Finance
The rupee fell 5 paise to 83.09 per dollar in early trade on Wednesday, as rising crude oil prices and the strength of the US currency weighed on market morale. According to forex traders, the currency is trading lower due to a strong dollar and continuous foreign fund outflows in recent days.
The domestic unit opened at 83.08 on the interbank foreign exchange, then fell to 83.09, a 5 paise drop from its previous closing. The rupee fell 33 paise to settle at 83.04 against the US dollar on Tuesday.
Meanwhile, the dollar index, which measures the strength of the US currency against a basket of six currencies, declined 0.09 percent to 104.71. Brent crude futures increased 0.07 percent to USD 90.10 per barrel, the global oil benchmark.
According to Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP, Saudi Arabia and Russia rocked the oil market when they extended production cutbacks until December, bringing Brent oil to USD 90.19 per barrel.
This meant that supplies would be tighter over the next four months, as markets predicted a supply cut only until October. Oil is India’s largest import, and any increase in oil prices will exacerbate the country’s current account deficit, according to Bhansali. The rupee was sold as oil prices spiked and RBI allowed a move above 83 as demand from oil companies kept the US dollar higher, Bhansali said.
The 30-share BSE Sensex was trading 76.15 points, or 0.12%, higher at 65,856.41 in the domestic equity market. The NSE Nifty gained 18.35 points, or 0.09 percent, to 19,593.25. According to exchange data, foreign institutional investors (FIIs) were net sellers in the capital markets on Tuesday, offloading shares worth Rs 1,725.11 crore.
Source:FE
