The dip can be attributed to the strength of the American currency in the overseas market and a negative trend in domestic equities. At the interbank foreign exchange, the rupee opened weak at 82.25 against the dollar and then fell to 82.29, registering a decline of 37 paise over its last close. On Monday, the rupee had settled at 81.92 against the US dollar.
The dollar index, which gauges the strength of the greenback against a basket of six currencies, has risen 0.18 per cent to 105.80 on Wednesday. The US Federal Reserve Chair Jerome Powell’s recent remarks on the interest rate trajectory have pushed the dollar higher. Powell’s statement that the latest economic data have come in stronger than expected and that faster tightening may be warranted has led to the rise in the dollar.
In the domestic equity market, the 30-share BSE Sensex was trading 348.62 points or 0.58 per cent lower at 59,875.84 points. The broader NSE Nifty declined 93.60 points or 0.53 per cent to 17,617.85 points. On Tuesday, both stock and money markets were closed on account of Holi.
Meanwhile, Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Monday as they purchased shares worth ₹ 721.37 crore, according to exchange data. Brent crude futures, the global oil benchmark, advanced 0.28 per cent to USD 83.52 per barrel.
The rupee’s decline against the dollar may impact the import-export market and the overall economy. Analysts predict that the rupee may see further depreciation in the coming days if the dollar continues to strengthen in the international market. The Reserve Bank of India may take steps to stabilize the rupee if the decline continues for a longer duration.
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