Rupee slips 7 paise to 89.97 amid FII outflows, higher crude prices

The rupee weakened 7 paise to 89.97 against the US dollar in early trade as foreign fund outflows, rising crude oil prices and concerns over potential US tariff hikes dampened sentiment. Weak domestic equities added to pressure.

Mumbai: The rupee fell 7 paise to 89.97 against the US dollar in early trade on Friday amid sustained FII outflows and a rise in global crude oil prices.

The apprehension of further tariffs by the US and weak sentiments at the domestic equity markets fuelled selling of equities by foreign investors, putting more pressure on the local unit, forex traders said.

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At the interbank foreign exchange, the rupee opened at 88.88 against the US dollar before slipping to 89.97, down 7 paise from its previous close.

The rupee settled 3 paise lower at 89.90 against the US dollar on Thursday, amid sustained outflow of foreign funds and a stronger greenback.

“There was huge volatility in the rupee market on Thursday as the RBI sold dollars at 89.99 and brought rupee up to 89.73 and then FPIs bought dollars. The RBI has been capping the dollar upside presently, creating huge oversold positions for itself which could keep the dollar well bid at lower levels as the RBI would try to square up positions,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

Meanwhile, the dollar index, which measures the strength of the greenback against a basket of six currencies, was trading flat at 98.93.

Brent crude, the global oil benchmark, was trading 0.53 per cent higher at USD 62.32 per barrel in futures trade.

On the domestic equity market front, the 30-share benchmark index Sensex declined 78.84 points to 84,102.12, while the Nifty dipped 21.50 points to 25,850.85.

Foreign institutional investors offloaded equities worth Rs 3,367.12 crore on Thursday, according to exchange data.