The Indian rupee fell by 11 paise to trade at 95.84 per US dollar on the back of escalation in the geopolitical situation, high cost of crude oil, and the strengthening of the US dollar that has lately been impacting the Indian rupee. In the previous session, the Indian rupee had traded at 95.73 per US dollar.
The rupee opened at 95.84 in the interbank foreign exchange market amid the early sessions of trading. As some analysts say, the rise in demand for the US dollar on account of increasing global uncertainties is the reason behind the depreciation of the Indian rupee.
High crude oil prices continue to remain a major area of concern for the Indian rupee. The price of Brent crude oil is now being traded at $102.08 a barrel, even though it has declined by nearly 1 per cent in the current session of trading. This is so because India is highly dependent on crude oil imports.
US dollar index, which gauges the performance of the US currency vis-à-vis the rest of the world’s major currencies, was up at 100.87, increasing by 0.06 per cent. Higher bond yields in the United States and a strong dollar have further aggravated the plight of the currencies of the emerging markets.
Under such circumstances, the local markets have thrown more wood into the fire. Sensex dropped by 506.43 points, down 0.68 per cent to close at 74,321.82. Nifty dropped by 181 points or 0.77 per cent to close at 23.
Foreign Institutional Investors have done wonders for the Indian currency as they purchased Indian equities to the tune of ₹1,617.
This was not enough to counter the overall negative sentiment due to developments in global foreign exchange and commodities markets.
The rupee’s movement through the course of the day will be dependent on the prices of crude oil, global dollar movements and geopolitical events.
