Indian rupee depreciates against UAE dirham on high demand for dollar

The Indian rupee depreciated four paise to 79.96 against the US dollar (21.78 versus the UAE dirham) in opening trade on Wednesday amid demand for the dollar from oil importers and firm crude oil prices.

Forex traders said significant dollar demand from oil importers, firm crude oil prices as well as concerns about swelling trade deficit weighed on investor sentiments.

At the Indian interbank foreign exchange, the rupee opened at 79.91 against the US dollar, then fell to 79.96, registering a decline of 4 paise over the last close.

On Tuesday, the rupee recovered from its all-time low of 80.05 to close six paise higher at 79.92 against the US dollar following forex inflows and suspected RBI intervention.

According to Anil Kumar Bhansali, head of treasury, Finrex Treasury Advisors, Asian currencies are all up against the dollar.

“Oil companies are still buying US dollar along with panicked importers,” Bhansali said.

On the Indian equity market front, the 30-share Sensex was trading 637.17 points or 1.16 per cent higher at 55,404.79, while the broader NSE Nifty advanced 188.45 points or 1.15 per cent to 16,529.00.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.13 per cent at 106.54.

Global oil benchmark Brent crude futures fell 0.39 per cent to $106.93 per barrel.

Foreign institutional investors remained net buyers in the capital market on Tuesday as they purchased shares worth Rs9.76 billion, as per exchange data.

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