Traders say that continuous foreign fund outflows and high crude oil prices also weakened the position of the rupee.
Traders say that continuous foreign fund outflows and high crude oil prices also weakened the position of the rupee.
The rupee fell by 12 paise to 75.72 against the US dollar in early trade on Tuesday, February 15, 2022, as geopolitical tensions and high domestic inflation weighed on investor sentiments.
Forex traders said sustained outflow of foreign funds and rise in crude oil prices also weakened the rupee. At the interbank foreign exchange, the rupee opened at 75.60 against the US dollar, then slipped further to 75.72, recording a fall of 12 paise from the previous close.
On February 14, the rupee had closed at a nine-week low of 75.60 against the US currency, down 24 paise.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.18 per cent to 96.19.
Inflation breaks RBI’s ‘upper tolerance’
On the domestic macroeconomic front, the retail inflation rate crossed the RBI’s upper tolerance limit of 6 per cent for the first time in seven months in January, while the wholesale price index remained in double digits for the 10th consecutive month.
“Russia-Ukraine tensions and rising concerns about its impact on crude and a potentially higher global interest rate scenario may limit appreciation bias,” said Sriram Iyer, senior research analyst at Reliance Securities.
Besides, differing policy stances of RBI and US Federal Reserve, high domestic inflation and central bank’s inaction to control it may also limit appreciation bias, Iyer said.
Meanwhile, global oil benchmark Brent crude futures fell 0.68 per cent to $95.82 a barrel.
On the domestic equity market front, the 30-share Sensex was trading 233.49 points or 0.41 per cent higher at 56,639.33 points, while the broader NSE Nifty rose 48.35 points or 0.29 per cent to 16,891.15.
Foreign institutional investors remained net sellers in the capital market on Monday as they sold shares worth Rs 4,253.70 crore, according to stock exchange data.
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