Rupee weakens 9 paise to 85.67 amid rising US yields, FII outflows
According to forex traders, elevated global crude oil prices added to the downward pressure on the USD/INR pair. In early trade at the interbank foreign exchange market, the rupee opened at 85.65 and slipped to 85.67 against the US dollar, marking a decline of 9 paise from its previous close.
Mumbai: The rupee depreciated 9 paise to 85.67 against the American currency in early trade on Wednesday, as market sentiment soured under pressure from rising US Treasury yields and persistent foreign fund outflows.
Forex traders said global crude oil prices intensified the downside pressure on the USD/INR pair.
At the interbank foreign exchange, the domestic unit opened at 85.65 and fell to 85.67 against the greenback, registering a loss of 9 paise over its previous close.
On Tuesday, the rupee depreciated 16 paise to close at 85.58 against the US dollar.
The rupee fell on Tuesday as oil companies bought dollars to refill strategic reserves amid geo-political turmoil. FPIs were also sellers to the extent of Rs 10,000 crore, which could be mainly on account of the Airtel Singtel deal, said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.
Foreign institutional investors (FIIs) offloaded equities worth Rs 10,016.10 crore on a net basis on Tuesday, according to exchange data.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.47 per cent at 99.65, on poor fiscal prudence and weak economic outlook.
“Globally, the US 10-year yield has once again climbed the ladder, sustaining near 4.5 per cent levels, reflecting mounting concerns over fiscal indiscipline and delayed monetary easing, which is pushing up borrowing costs,” CR Forex Advisors MD Amit Pabari said.
Brent crude, the global oil benchmark, rose 1.47 per cent to USD 66.34 per barrel in futures trade.
“Crude prices rose by more than a dollar after media reports that Israel was preparing to attack Iranian nuclear facilities, raising supply concerns out of the key Middle East producing region and bringing geo-political concerns back into the focus,” Bhansali said.
In the domestic equity market, the 30-share BSE Sensex advanced 201.89 points, or 0.25 per cent, to 81,388.33, while the Nifty rose 44.15 points, or 0.18 per cent, to 24,728.05.
