Rupee falls 25 paise to 83.07 against US dollar in early trade

Mumbai: The rupee depreciated 25 paise to 83.07 against the US dollar in early trade on Monday as a negative trend in domestic equities and firm crude oil prices weighed on investor sentiments.

Forex traders said the rupee is trading lower on a strong dollar and sustained foreign fund outflows over the past few days.

At the interbank foreign exchange, the domestic unit opened at 83.04, then touched 83.07, registering a decline of 25 paise over its last close.

On Friday, the rupee had settled 16 paise lower at 82.82 against the dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.17 per cent to 103.01.

Brent crude futures, the global oil benchmark, fell 0.89 per cent to USD 86.04 per barrel.

In the domestic equity market, the 30-share BSE Sensex was trading 484.37 points or 0.74 per cent lower at 64,838.28. The broader NSE Nifty declined 151.85 points or 0.78 per cent to 19,276.45.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday as they offloaded shares worth Rs 3,073.28 crore, according to exchange data.

Meanwhile, India's forex reserves dropped for the third consecutive week, declining by USD 2.417 billion to USD 601.453 billion as of August 4, the Reserve Bank said on Friday.

In the previous reporting week, the overall reserves had dropped by USD 3.165 billion to USD 603.87 billion.

According to the official data released on Friday, India's industrial production growth declined to a three-month low of 3.7 per cent in June mainly due to poor showing by the manufacturing sector.

"On the domestic front, focus will be on the inflation number and an uptick could weigh on the currency. We expect the USDINR(Spot) to trade sideways and quote in the range of 82.50 and 82.90," said Gaurang Somaiya, forex and bullion analyst, Motilal Oswal Financial services.