Rupee slips to 86.17 as crude oil surges, Middle East tensions rise

The Indian rupee fell 6 paise to 86.17 against the US dollar in early trade Monday amid rising crude prices and geopolitical tensions. FII outflows also weighed on the rupee, despite gains in equities and rising forex reserves.

Mumbai: Rupee declined 6 paise to 86.17 against the US dollar in early trade on Monday as global crude oil prices continued to surge amid escalating tensions in the Middle East.

A strong dollar against international currencies and FII outflows further pressured the rupee, while a positive opening at the domestic equity market and an increase in the country’s forex reserves prevented further losses, according to forex traders.

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At the interbank foreign exchange, the local unit opened at 86.16 before falling further to 86.17 against the greenback, down 6 paise from its previous close. The rupee had plummeted 59 paise to 86.11 against the US dollar on Friday.

Brent crude, the global oil benchmark, rose 0.77 per cent to USD 74.30 per barrel in futures trade as the Israel-Iran conflict escalated.

India’s forex reserves increased USD 5.17 billion to USD 696.65 billion for the week ended June 6, the Reserve Bank of India said on Friday.

In the domestic equity market, the 30-share BSE Sensex rose 288.79 points to 81,407.39 in early trade while Nifty was up 98.9 points to 24,817.50.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.15 per cent to 98.33.

Foreign institutional investors (FIIs) offloaded equities worth Rs 1,263.52 crore on a net basis on Friday, according to exchange data.