Rupee Falls 29ps To 85.90/$

Mumbai: The rupee depreciated for the second consecutive session and settled for the day lower by 29paise at 85.90 against the US dollar on Wednesday, dragged down by risk-averse sentiments and foreign fund outflows. Forex traders said the local unit remained under pressure on geopolitical tensions between Russia-Ukraine and elevated crude oil prices. Moreover, investors are also awaiting cues from the Reserve Bank’s monetary policy announcements, they said. The Reserve Bank’s rate-setting panel started its three-day brainstorming on monetary policy on Wednesday and the outcome is scheduled to be announced on June 6. Experts are of the view that the RBI may reduce the repo rate by 25 bps on Friday and another similar cut in the next policy.

SBI research expects the central bank to go in for a “jumbo” rate cut of 50 bps in June itself. At the interbank foreign exchange, the domestic unit opened at 85.69 and moved between the high of 85.69 and a low of 86.05 against the greenback during the day. The unit closed the session at 85.90 against the dollar, registering a loss of 29paise from its previous close.

On Tuesday, the rupee depreciated 22paise to settle at 85.61 against the US dollar. The local unit registered the second consecutive session of fall and has lost 51 paise over the greenback. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.12 per cent at 99.11.