Rupee falls 8 paise to close at 86.96 against US dollar

Rupee depreciated 8 paise to close at 86.96 (provisional) against US dollar weighed down by sustained foreign fund outflows and an uptick in the US Dollar index.

Forex traders said there is a negative bias for the USD/INR pair as foreign investors continue to sell domestic equities and the RBI support is tapering off slowly. At the interbank foreign exchange, the rupee opened at 86.94 and touched the high of 86.91 against the greenback during intraday.

It also touched the low of 86.98 before ending the session at 86.96 (provisional) against the dollar, logging a loss of 8 paise from its previous close. On Monday, the rupee depreciated 17 paise to close at 86.88 against the US dollar. Traders said disappointing trade deficit data from the domestic markets too pressurised the rupee. India’s exports declined for the third month in a row in January, falling by 2.38 per cent year-on-year to USD 36.43 billion, while the trade deficit widened to USD 22.99 billion in the month.

Imports rose by 10.28 per cent year-on-year to USD 59.42 billion in January due to an increase in gold shipments, according to the Commerce Ministry data. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 106.95, higher by 0.35 per cent. Brent crude, the global oil benchmark, was quoted 0.77 per cent higher at USD 75.80 per barrel in futures trade. In the domestic equity market, the 30-share BSE Sensex declined 29.47 points, or 0.04 per cent, to settle at 75,967.39, while the Nifty fell 14.20 points, or 0.06 per cent, to 22,945.30 points.