The Indian rupee lost 6 paise against the US dollar, reaching 82.81, during the early trade on Tuesday. This drop was influenced by a negative trend in domestic stock markets and steady crude oil prices, which dampened investor confidence.
Experts in the forex trading field noted that the rupee’s decline was due to a strong dollar and the withdrawal of foreign funds over the past few days. At the start of interbank foreign exchange trading, the rupee opened at 82.80 and then slipped further to 82.81. This marked a decrease of 6 paise compared to its previous close. This decline coincided with the beginning of the RBI monetary policy committee meeting, with the policy decision set to be disclosed on Thursday.
Just the previous day, the rupee had managed to gain 6 paise against the dollar, settling at 82.75. Conversely, the dollar index, which measures the dollar’s strength against a group of six major currencies, climbed by 0.28 percent to 102.33.
Global crude oil benchmark Brent crude futures showed a slight increase of 0.12 percent, reaching USD 85.44 per barrel.
Traders reported that the rupee was experiencing limited fluctuations and trading within a narrow range as anticipation built around the upcoming RBI policy statement scheduled to be released later in the week. Gaurang Somaiya, a Forex and Bullion Analyst at Motilal Oswal Financial Services, stated that while the central bank was expected to maintain interest rates, the commentary following the decision could lead to currency volatility. Comments regarding inflation would be particularly watched, as they could provide insights into the rupee’s performance.
Meanwhile, the US dollar was also trading without significant changes due to a lack of major cues from the United States.
Somaiya further added that the trade balance data from the US would draw attention, as better-than-expected results could lend support to the dollar at lower levels. He projected that the USDINR (Spot) currency pair would likely trade sideways, with a projected range between 82.50 and 82.90.
In the domestic stock market, the BSE Sensex, comprising 30 major stocks, was down by 65.93 points or 0.10 percent at 65,887.55. The broader NSE Nifty, which represents a diverse set of stocks, declined by 14.10 points or 0.07 percent, reaching 19,583.20.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on the preceding day, as they divested shares amounting to Rs 1,892.77 crore, according to data from exchanges.
