The rupee depreciated by 4 paise at 79.96 against the US dollar in early trade on Wednesday amid firm dollar demand from oil importers and firming crude oil prices.
Forex traders said significant dollar demand from oil importers, firming crude oil prices as well as concerns of widening trade deficit weighed on investor sentiments.
At the interbank foreign exchange, the rupee opened at 79.91 against the US dollar, then closed at 79.96, registering a decline of 4 paise over the previous close.
The rupee on Tuesday advanced 6 paise to 79.92 against the US dollar from its all-time low of 80.05 on the back of foreign exchange inflows and questionable RBI intervention.
According to Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors, Asian currencies are up against the dollar. “Oil companies are still buying USD with panicked importers,” Mr. Bhansali said.
On the domestic equity market front, the 30-share Sensex was trading 637.17 points or 1.16% higher at 55,404.79, while the broader NSE Nifty was trading 188.45 points or 1.15% higher at 16,529.00.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.13% at 106.54.
Global oil benchmark Brent crude futures fell 0.39% to $106.93 a barrel.
Foreign institutional investors remained net buyers in the capital markets on Tuesday as they bought shares worth Rs 976.40 crore, according to exchange data.