The Indian rupee depreciated by 16 paise to 83.10 against the US dollar in early trade on Monday. The currency’s decline was influenced by subdued equity market sentiment and a firm American currency against major rivals overseas. Forex traders attributed the depreciation to the withdrawal of foreign funds from domestic equities and the upward movement in crude oil prices. The domestic unit opened weak at 83.04 and reached a low of 83.10 against the greenback, marking a fall of 16 paise from its previous close. On the previous Friday, the rupee had gained 19 paise to close at 82.94 against the dollar. The rupee’s gain was driven by JP Morgan’s announcement that it will include Indian government securities in its global bond index from June 2024, which is expected to bring in USD 25-30 billion of inflows into the Indian debt market.
On the other hand, the dollar strengthened due to increased month-end demand for the American currency by importers and rising US Treasury yield. The dollar index, which measures the strength of the greenback against a basket of six currencies, fell slightly by 0.01% to 105.58. Brent crude futures, the global oil benchmark, rose by 0.19% to $93.45 per barrel.
In the domestic equity market, the 30-share BSE Sensex was trading 20.68 points or 0.03% lower at 65,988.47 points. The broader NSE Nifty declined 12.65 points or 0.06% to 19,661.60.
India’s foreign exchange reserves decreased by $867 million to $593.037 billion in the week ending September 15, as reported by the Reserve Bank. Additionally, Foreign Institutional Investors (FIIs) were net sellers in the capital market on Friday, offloading shares worth ₹1,326.74 crore, according to exchange data.
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