Rupee loses 84 paise in three sessions, closes at 95.22 against dollar

The rupee fell 29 paise to close provisionally at 95.22 against the US dollar on Monday, marking its third consecutive session of losses. Elevated crude prices and geopolitical tensions weighed on sentiment, while gains in domestic equities cushioned the decline

Mumbai: The rupee depreciated for the third consecutive session, settling 29 paise lower at 95.22 (provisional) against the US dollar on Monday, weighed down by elevated crude oil prices and geopolitical tensions in the Middle East.

Forex traders said the rupee weakened amid a stronger dollar and a slight rise in US Treasury yields, while a recovery in domestic equity markets cushioned the decline.

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At the interbank foreign exchange market, the rupee opened at 94.92 against the dollar before losing ground to touch an intra-day low of 95.26. It finally settled at 95.22 (provisional), down 29 paise from its previous close.

On Friday, the rupee had depreciated 12 paise to close at 94.93 against the US dollar.

Over the last three trading sessions, the rupee has lost 84 paise against the US dollar.

“We expect the rupee to trade with a negative bias due to risk aversion amid an escalation of geopolitical tensions in the Middle East and between Russia and Ukraine.

“Elevated crude oil prices amid supply concerns and selling pressure by FIIs may also pressurise the rupee. However, any intervention by the RBI may support the rupee at lower levels,” said Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan.

The USD-INR spot price is expected to trade in a range of 94.90 to 95.50.

The dollar index, which measures the greenback’s strength against a basket of six currencies, was trading 0.01 per cent higher at 101.82.

Brent crude, the global oil benchmark, was trading 1.41 per cent lower at USD 115.08 per barrel in futures trade.

“The immediate USD/INR range to monitor is 94.30-95.50. A sustained move above Rs 95.50 would indicate renewed depreciation pressure, whereas a break below Rs 94.30 could extend the rupee’s recovery.

“Overall, the currency outlook remains cautious, with oil supply risks and the direction of global interest rates likely to outweigh short-term support from central bank measures,” said Gaurav Garg, Head of Research at Lemonn.

On the domestic equity market front, the Sensex climbed 482.92 points to settle at 73,606.75, while the Nifty rallied 153.20 points to close at 22,753.20.

Foreign Institutional Investors (FIIs) purchased equities worth Rs 887.65 crore on a net basis on Friday, according to exchange data.

Meanwhile, data released by the Reserve Bank of India (RBI) on Friday showed that India’s forex reserves declined by USD 5.011 billion to USD 721.016 billion in the week ended October 16. In the previous reporting week, the reserves had fallen by USD 8.578 billion to USD 726.027 billion.