Rupee falls 32 paise to 95.57 against US dollar amid rising crude prices

The rupee depreciated by 32 paise to 95.57 against the US dollar in early trade on Thursday as rising crude oil prices, continued US-Iran hostilities, foreign fund outflows and weak domestic equities weighed on investor sentiment and the domestic currency.

Mumbai: The rupee plunged by 32 paise to 95.57 against the US dollar in early trade on Thursday following a rise in global crude oil prices as hostilities between the US and Iran continued.

Heavy FII outflows, weak domestic equity market and a marginally stronger greenback further weighed on the local unit.

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At the interbank foreign exchange market, the rupee opened at 95.55 against the US dollar before dropping further to 95.57.

The local unit appreciated 16 paise to close at 95.25 against the US dollar on Wednesday, amid likely intervention from the Reserve Bank of India (RBI) to curb excessive volatility and prevent a further slide in the domestic unit.

“The rupee had a weaker opening with oil prices climbing after Iran and the United States traded strikes. INR has support due to dollar selling by state-run banks, likely on behalf of RBI.

“Apart from oil prices, the rupee will have to contend with a tepid risk environment, following a further sell-off in US equities. While US inflation rose to 4.2 per cent year-on-year, the highest level in more than three years, the core measure increased less than expected, leaving near-term Federal Reserve rate expectations largely unchanged,” Aamir Makda, Commodity & Currency Analyst, Commodity Technical Research at Choice Broking, said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 99.95, up 0.01 per cent.

Brent crude, the global oil benchmark, was trading higher by 1.65 per cent at USD 94.64 per barrel in futures trade.

On the domestic equity market front, Sensex declined 358.54 points to 73,624.64 in early trade, while Nifty was down 117 points to 23,098.30.

Foreign institutional investors offloaded equities worth Rs 2,124.98 crore on a net basis on Wednesday, according to exchange data.