Rupee falls nine paise to 83.53 against U.S. dollar in early trade

Forex traders said a negative trend in domestic equities and sustained foreign fund outflows also dented investor sentiments.

On April 15, the Rupee declined six paise to settle at 83.44 against the U.S. dollar. | Photo Credit: The Hindu

The Rupee depreciated nine paise to 83.53 against the U.S. dollar in early trade on April 16, weighed down by a strong American currency and elevated crude oil prices.

Forex traders said a negative trend in domestic equities and sustained foreign fund outflows also dented investor sentiments.

According to interbank foreign exchange, the Rupee opened at 83.51 against the dollar and touched a low of 83.53 in the initial trade, registering a fall of nine paise over its previous close. On April 15, the Rupee declined six paise to settle at 83.44 against the U.S. dollar.

“Rupee fell further as foreign portfolio investors continued to buy dollars and sell stocks on risk aversion due to Middle East tensions and U.S. yields heading higher,” said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.

"Need to watch what the Reserve Bank of India (RBI) does to counter the Rupee depreciation," Mr. Bhansali added. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was at 106.34, higher by 0.13%.

Brent crude futures, the global oil benchmark, rose 0.53% to $90.58 per barrel, as Israel weighed response to the Iran attack amidst heightened tensions in the Middle East.

On the domestic equity market, the 30-share BSE Sensex was trading 307.44 points or 0.42% lower at 73,092.34 points. The broader NSE Nifty was down 76.50 points or 0.34% to 22,196.00 points.

“Foreign Institutional Investors (FIIs) were net sellers in the capital markets on April 15 as they offloaded shares worth ₹3,268.00 crore,” according to exchange data.

On the macroeconomic front, wholesale inflation in the country rose marginally to a three-month high of 0.53% in March compared to 0.20% in the preceding month due to an increase in prices of vegetables, potato, onion, and crude oil.

Moreover, India's merchandise exports dipped marginally in March to $41.69 billion, and by 3.11% during the last fiscal year to $437.06 billion mainly due to continued geopolitical turmoil, and depressed global trade.