Indian rupee depreciated by around 30 paise during the afternoon trade on May 27 due to sell-off in Indian equities and strong dollar index, currency experts said.
At 2:15 PM, the local currency was trading at 85.4012 against the US dollar, as compared to 85.0912 against the greenback at previous close. It opened at 85.1438 against the US dollar.
“Stronger DXY (Dollar index) globally and selling in equity in domestic market leading to dollar demand, hence rupee is falling,” said Amit Pabari, managing director at CR Forex Advisors.
The benchmark equity indices tumbled sharply by over 1 percent on Tuesday, snapping a two-day rally, as weak cues from Asian markets and selling in IT and financial shares triggered a broad-based selloff.
The Sensex dropped 888.62 points or 1.08 percent to 81,287.13 at 2:15 PM. The broader Nifty also slumped 272.65 points or 1.11 percent to 24,718.00.
On the other hand, dollar index, which measures the greenback's strength against a basket of six major currencies, rose to 99.359 during afternoon trade, as compared to 98.934 at previous close.
A dealer at a brokerage firm said, dollar index is rising due to short covering in the market. Also, there is demand from oil marketing companies for dollars.
On May 26, the local currency climbed below 84 levels during afternoon trade, but lost gains due to bids from state-owned banks on behalf of oil marketing companies.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
