FPI outflows weigh on Rupee
Settles 4 paise lower at 83.50/$; Dollar index was trading at 104.40, higher by 0.06%
Mumbai: The rupee stayed range-bound and settled 4paise lower at 83.50 against the US dollar on Thursday, weighed down by unabated foreign fund outflows amid investors’ weak appetite for riskier assets.However, a firm trend in domestic equities supported the local unit and restricted its losses, forex traders said.
The rupee remains under pressure due to ongoing elections and foreign fund outflows, and the same shall subside once the results are out, they added. At the interbank foreign exchange market, the local unit traded in a narrow range. It opened at 83.45 and touched an intraday high of 83.44 and a low of 83.50. The domestic unit finally settled for the day at 83.50, down 4paise from its previous close.
On Wednesday, the rupee had settled at 83.46 against the US dollar. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 104.40, higher by 0.06 per cent. The decline in oil prices is set to have a beneficial effect on India’s trade balance, especially considering that petroleum products make up 25 per cent of its total import spending, according to experts. The reduced oil prices are anticipated to ease the strain on the trade deficit, providing a more positive outlook for the rupee. On the domestic equity market, Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday, as they offloaded shares worth Rs2,832.83 crore, according to exchange data.
