In view of the strength of the US currency in the foreign market, the rupee fell by 12 paise to 77.62 against the US dollar in early trade on Thursday. The Indian currency opened at 77.61 against the US dollar, then jumped back to 77.57 in afternoon deals. The domestic currency had closed 21 paise higher at 77.50 against the US dollar on Wednesday from its record low.
Indian Rupee On Thursday, a weak opening against the dollar, a recovery in the US dollar and consolidating bond yields weighed it down. However, Sriram Iyer, Senior Research Analyst, Reliance Securities, said a sell-off in crude oil prices on Thursday morning could check the depreciation bias.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.05 per cent higher at 102.55. International oil benchmark Brent crude fell 1.56% to $114 a barrel.
Equity benchmarks rose after falling in early trade. The BSE Sensex was up over 180 points at 55,560 in afternoon deals while the Nifty was marginally higher at 16,549.
The Indian rupee is facing a tough time as it has fallen to an all-time low against the dollar earlier this month. India was also hit by the war-caused oil shock, which raised import bills and widened the country’s trade gap. Experts said rising inflation, rate cut by the Federal Reserve policy pushing hot money into dollar assets, has weakened other currencies in relation to the US.
The currency has declined over 4% this year amid concerns that the Reserve Bank of India (RBI) is behind the curve in tackling inflation, with rising crude oil prices adding to pressure on the net importer. According to a Bloomberg survey, the central bank is forecast to increase its benchmark repurchase rate to 5.5% in the coming months from the current level of 4.4%.
(with inputs from agencies)