Indian rupee slumps against UAE dirham as Ukraine tension escalates

The Indian rupee declined 24 paise to 74.79 against the US dollar (20.37 against Emirati dirham) in opening trade on Tuesday, amid weak risk appetite as tensions escalated in eastern Europe.

Forex traders said sustained foreign fund outflows from India, a lacklustre trend in Indian equities and elevated crude oil prices weighed on investor sentiment.

At the Indian interbank foreign exchange, the rupee opened at 74.71 against the dollar, then slipped further to 74.79, registering a decline of 24 paise from the last close.

"Crude oil prices surged higher this Tuesday morning, while most of the Asian and emerging market peers were weaker against the US dollar as the Ukraine crisis could escalate further," said Sriram Iyer, senior research analyst at Reliance Securities.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.12 per cent to 96.19.

"The US dollar started flat to higher this early Tuesday morning in Asian trade, amid safe-haven appeal for the greenback as Russia ordered troops into breakaway parts of eastern Ukraine and the region stood on the brink of war," Iyer said, adding that non-dollar currencies remained under pressure early Tuesday morning.

Meanwhile, global oil benchmark Brent crude futures jumped 1.42 per cent to $96.74 per barrel.

On the Indian equity market front, the 30-share Sensex was trading 922.71 points or 1.60 per cent lower at 56,760.88, while the broader NSE Nifty slipped 267.50 points, or 1.55 per cent, to 16,939.15.

(with inputs from PTI)

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