Rupee falls 26 paise to 81.93 against USD on forex outflows
Mumbai, Nov 23 (PTI) The rupee depreciated 26 paise to close at 81.93 against the US currency on Wednesday due to dollar buying by banks on behalf of importers and rising crude oil prices in the overseas markets.
Besides, persistent foreign capital outflows also weighed on investor sentiments, forex traders said.
At the interbank foreign exchange market, the local unit opened at 81.81 and later witnessed an intraday high of 81.74 and a low of 81.93 during the session.
The domestic unit finally settled at 81.93 against the American currency, registering a fall of 26 paise over its last close of 81.67.
"Indian Rupee depreciated on Dollar demand from importers and recovery in crude oil prices. FII outflows also weighed on Rupee," said Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas.
The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.21 per cent to 106.99.
"The Indian Rupee weakened...on Wednesday on cash dollar outflows and weaker Asian and emerging market peers," said Sriram Iyer, Senior Research Analyst at Reliance Securities.
The local unit was in a narrow range during the session as investors awaited further cues from the US Fed meeting minutes which will likely provide more cues, Iyer added.
Global oil benchmark Brent crude futures advanced 0.91 per cent to USD 89.16 per barrel.
Foreign Institutional Investors (FIIs) were net sellers in capital markets as they offloaded shares worth Rs 789.86 crore on Wednesday, according to exchange data.
"We expect the Rupee to trade with a negative bias on concerns over rising COVID-19 cases in China and hawkish Fed speak. Though some Fed officials hint that they are open to a slower pace of rate hike, the US central bank will not pause its rate hike," Choudhary said.
Traders may take cues from manufacturing and services PMI, durable goods orders and new home sales data. They will remain cautious ahead of the Federal Open Market Committee (FOMC) meeting minutes later today, Choudhary added.
On the domestic equity market front, the 30-share BSE Sensex rose 91.62 points or 0.15 per cent to end at 61,510.58, while the broader NSE Nifty advanced 23.05 points or 0.13 per cent to 18,267.25.
"Rupee continued to trade in a narrow range and volatility remained low in the past few sessions," said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.
Euro and pound are trading on a flat note ahead of preliminary manufacturing to services PMI numbers.
Also from the US, FOMC meeting minutes will be released and that could keep the volatility in dollars elevated.
The expectation is that officials at the central bank will continue to remain hawkish. PTI DRR BAL BAL