Indian rupee opens sharply lower in early trade

Sustained foreign fund outflows and firm crude oil prices further dented investor sentiments, forex traders said

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File photo

A Staff Reporter

Published: Mon 6 Feb 2023, 10:30 AM

The Indian rupee depreciated 42 paise to 82.50 against the US dollar (22.48 versus the UAE dirham) in early trade on Monday, weighed down by a strong American currency and a muted trend in the Indian equities.

Sustained foreign fund outflows and firm crude oil prices further dented investor sentiments, forex traders said.

At the Indian interbank foreign exchange, the South Asian currency opened weak at 82.35 against the dollar, then fell to 82.50, registering a decline of 42 paise over its last close.

In the previous session on Friday, the rupee settled at 82.08 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.17 per cent to 103.09.

Brent crude futures, the global oil benchmark, advanced 0.25 per cent to $80.14 per barrel.

The rupee started this Monday on a weaker note against the dollar after a better-than-expected US jobs report prompted investors to bet on more Federal Reserve rate increases, said Sriram Iyer, senior research analyst at Reliance Securities.

Supports for the USD/INR spot pair are at 81.910 and 81.60, and resistances are at 82.50 and 82.750. The pair could remain within the levels this Monday, Iyer said.

The key trigger for the markets will be the RBI MPC meeting for February this week; however, further gains in the greenback could weigh on sentiments, Iyer added.

The Reserve Bank is likely to settle for a smaller 25 basis points repo rate hike in its forthcoming bi-monthly monetary policy due later this week, as retail inflation is showing signs of softening and the US Fed moderating the pace of increase in its benchmark interest rate.

In the Indian equity market, the 30-share BSE Sensex was trading 242.95 points, or 0.40 per cent lower at 60,598.93. The broader NSE Nifty declined 100.20 points or 0.56 per cent to 17,753.85.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday as they offloaded shares worth ₹9.32 billion, according to exchange data.

(With inputs from PTI)


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