Mumbai, Oct 23 — The rupee traded almost flat, edging up by just 1 paisa to 84.07 against the US dollar in early Wednesday trade, as a strong American currency and continued foreign fund outflows weighed on the Indian currency.
Forex traders noted that downward trends in domestic equity markets and elevated crude oil prices further limited the rupee’s recovery potential. At the interbank foreign exchange market, the rupee opened slightly higher at 84.07 per dollar but remained largely flat in early dealings. On Tuesday, the rupee had settled 1 paisa lower at 84.08 against the greenback.
The Indian currency has struggled to bounce back since October 11, when it closed at its lowest level of 84.10 against the dollar. Analysts have attributed this pressure to continued selling of Indian equities by foreign institutional investors (FIIs), who are seeking better returns in the Chinese market. Additionally, a surge in US Treasury yields has sparked concerns that the Federal Reserve may delay its anticipated rate cuts, prompting investors to move toward safe-haven assets like the US dollar.
Meanwhile, the dollar index, which tracks the greenback’s strength against a basket of six major currencies, rose 0.06 per cent to 103.97. Brent crude, the international benchmark for oil, fell 0.22 per cent to USD 75.87 per barrel in futures trade.
On the domestic equity front, both major indices faced declines. The Sensex dropped 96.34 points, or 0.12 per cent, to 80,124.38, while the Nifty slipped 32.95 points, or 0.13 per cent, to 24,439.15. Both indices had fallen by more than 1 per cent during Tuesday’s session.
Foreign institutional investors continued their selling spree, offloading shares worth Rs 3,978.61 crore on Tuesday, according to data from stock exchanges.
