Rupee Hits Fresh Low On Oil Spike, Stronger Dollar And FII Outflows

At the interbank foreign exchange, the local unit opened at 85.96 and traded in a narrow range of 85.92-86.05 before settling at 86.02 (provisional), down 22 paise from its previous close.

The rupee depreciated 10 paise to close at 85.80 against the US dollar on Friday.

Source : ABPLIVE AI

The rupee depreciated 22 paise and fell below 86 level to close at 86.02 (provisional) against the US dollar on Monday amid a rise in global crude oil prices and a strengthening greenback.

Foreign fund outflows and delay in any breakthrough in the India-US trade deal further pressured the local unit, according to forex traders.

At the interbank foreign exchange, the local unit opened at 85.96 and traded in a narrow range of 85.92-86.05 before settling at 86.02 (provisional), down 22 paise from its previous close.

The rupee depreciated 10 paise to close at 85.80 against the US dollar on Friday.

"The Indian rupee again fell as India-US trade deal was yet to be seen while US President Donald Trump applied tariffs on the EU and Mexico, two of its biggest trading partners. Dollar index rose and kept the rupee lower for the entire day while Asian currencies were slightly weaker," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.03 per cent to 97.82.

Brent crude, the global oil benchmark, rose 1.56 per cent to USD 71.46 per barrel in futures trade.

"The Reserve Bank of India (RBI) was present to protect the rupee while FPIs who were sellers of equity on Friday were dollar buyers, keeping rupee well bid for the whole day without any major correction. We expect the rupee to move between 85.75 and 86.25 on Tuesday as we await for US CPI data," he said.

An Indian commerce ministry team reached Washington for another round of talks on the proposed bilateral trade agreement (BTA), according to an official. The four-day talks will start on Monday and conclude on Thursday.

On the domestic equity market front, the Sensex declined 247.01 points to settle at 82,253.46, while the Nifty dropped 67.55 points to 25,082.30.

Wholesale price inflation (WPI) turned negative after a gap of 19 months, declining 0.13 per cent in June as deflation widened in food articles and fuel, along with softening in manufactured product costs, government data showed on Monday.

Foreign institutional investors (FIIs) sold equities worth Rs 5,104.22 crore on a net basis on Friday, according to exchange data.

Further, the latest RBI data released on Friday showed India's forex reserves dropped USD 3.049 billion to USD 699.736 billion in the week ended July 4. 

(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)