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The rupee depreciated 40 paise to an all-time low of 81.93 against the US dollar in early trade on Wednesday as the strengthening of the American currency and risk-averse sentiment among investors weighed on the local unit.
Moreover, a negative trend in domestic equities and significant foreign fund outflows sapped investor appetite, forex traders said.
At the interbank foreign exchange, the rupee opened at 81.90 against the greenback, then fell to 81.93, registering a fall of 40 paise over its previous closing.
On Tuesday, the rupee consolidated in a narrow range and settled 14 paise higher at 81.53 against the dollar.
The rupee opened weaker on Wednesday as the dollar resumed its upward momentum supported by hawkish Fed talk, said Sriram Iyer, Senior Research Analyst at Reliance Securities.
The local unit could track the weakness of the Asian and emerging market peers, Iyer said, adding that a delay in local bonds’ inclusion for listing on a major global index this year could also cap gains.
“The Reserve Bank of India (RBI) may be present to curb volatility,” Iyer noted.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.40 per cent to 114.55.
Meanwhile, investors are eying the RBI monetary policy meeting decision on Friday.
Global oil benchmark Brent crude futures fell 1.33 per cent to USD 85.12 per barrel.
On the domestic equity market front, the 30-share BSE Sensex was trading 373.37 points or 0.65 per cent lower at 56,734.15, while the broader NSE Nifty fell 108.20 points or 0.64 per cent to 16,899.20.
Foreign institutional investors were net sellers in the capital market on Tuesday as they offloaded shares worth Rs 2,823.96 crore, as per exchange data.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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