Indian Rupee Falls 7 Paise Amid Stronger Dollar and Weak Equity Opening
Mumbai, February 24: The Indian rupee weakened by 7 paise to 90.96 against the US dollar in early trade on Tuesday, pressured by a rise in global crude oil prices and a firmer US dollar.At the interbank foreign exchange market, the rupee opened at 90.91 per dollar before sliding further to 90.96, marking a decline from its previous close of 90.89. On Monday, the domestic currency had gained 5 paise to settle at 90.89 against the greenback.
Crude Oil Surge and Dollar Strength Weigh on Rupee
The dollar index, which tracks the US dollar against a basket of six major currencies, was trading 0.11 percent higher at 97.81. The strengthening of the dollar added pressure on emerging market currencies, including the rupee.Brent crude, the global oil benchmark, climbed 0.85 percent to USD 72.10 per barrel. Higher crude prices typically weigh on the rupee, given India’s dependence on oil imports, increasing the demand for dollars in the domestic market.
Market participants noted that rising oil prices and the firm dollar contributed to the rupee’s early weakness.
Equity Market Weakness Adds to Pressure
The domestic equity markets opened lower, adding to the downward pressure on the local currency. The 30 share BSE Sensex fell 525.29 points to 82,769.37 in early trade, while the NSE Nifty declined 145.85 points to 25,567.15.However, foreign capital inflows provided some cushion. On Monday, foreign institutional investors bought equities worth Rs 3,483.70 crore, according to exchange data. These inflows helped prevent a sharper fall in the rupee despite adverse global cues.
Key Levels in Focus for Rupee Movement
Currency market participants indicated that the 91.00 level remains a crucial threshold for the rupee against the US dollar. While the central bank may be active in managing volatility around this level, continued buying pressure could test higher levels.With crude oil prices, the dollar index, and equity market trends in focus, traders are closely monitoring global developments for further direction in the rupee’s movement.
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