Rupee depreciates 7 paise to 85.75 against US dollar in early trade

The Indian currency, however, capped the fall on the back of some recovery in domestic equity markets and receding crude oil prices overseas

Mumbai: The rupee depreciated 7 paise to 85.75 against the US dollar in early trade on Tuesday, dragged down by a strong American currency and sustained outflow of foreign funds. The Indian currency, however, capped the fall on the back of some recovery in domestic equity markets and receding crude oil prices overseas, forex traders said.

At the interbank foreign exchange, the rupee opened at 85.77, slipped to 85.80 before trading again at 85.75 against the greenback in initial deals, 7 paise lower from its previous close. On Monday, the rupee settled 11 paise higher at 85.68 against the dollar. During intraday, the unit had touched the lowest level of 85.84 against the American currency.

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Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.09 per cent lower at 108.09. Brent crude, the global oil benchmark, declined 0.05 per cent to USD 76.26 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex recovered from deep plunge and was trading 369.05 points, or 0.47 per cent, higher at 78,334.04 points, while the Nifty was up 122.35 points, or 0.52 per cent, at 23,738.40 points. Both the indices crashed 1.60 per cent on Monday. Foreign institutional investors (FIIs) offloaded Rs 2,575.06 crore in the capital markets on a net basis on Monday, according to exchange data.

On the domestic macroeconomic front, India’s services sector growth touched a four-month high in December, supported by new business inflows on strong demand conditions and easing inflationary pressures, a monthly survey showed on Monday.

The seasonally adjusted HSBC India Services Business Activity Index, rose from 58.4 in November to 59.3 in December, highlighting the strongest rate of expansion in four months. According to the World Gold Council (WGC), the Reserve Bank of India (RBI) continued with its 2024 buying streak, adding a further 8 tonnes to its gold reserves in November. This lifted the year-to-date buying to 73 tonnes and total gold holdings to 876 tonnes, maintaining its position as the second largest buyer in 2024, after Poland.