Mumbai: Falling for the sixth day in a row, the rupee closed lower by 2 paise at 73.31 (provisional) against the US currency on Tuesday amid rising crude oil prices and dollar demand from oil importers.
At the interbank foreign exchange market, the rupee opened higher at 73.20 per dollar as against its previous close of 73.29. It hovered in the range of 73.16 to 73.33 per dollar during the day.
The domestic currency has lost 51 paise in the six trading sessions to Tuesday.
“Rupee depreciated for the sixth day in row, earlier such moves have been seen in April where it depreciated Rs 2.07 per dollar while this time the momentum is relatively slower,” said Dilip Parmar, Research Analyst, HDFC Securities.
Parmar further noted that “dollar demand from oil importers, absence of central bank’s interventions and a surge in the dollar index ahead of FOMC meeting dragged the rupee lower in the last couple of days.”
The rupee is likely to trade with depreciating bias following stronger dollar and crude oil, he noted.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.01 per cent to 90.53 ahead of a much-anticipated Federal Reserve meeting that could signal a change in the outlook for US monetary policy.
On the domestic equity market front, the BSE Sensex ended 221.52 points, or 0.42 per cent higher at 52,773.05, while the broader NSE Nifty advanced 57.40 points or 0.36 per cent to close at 15,869.25.
Brent crude futures, the global oil benchmark, rose 0.43 per cent to USD 73.17 per barrel.
Foreign institutional investors were net sellers in the capital market on Monday as they offloaded shares worth Rs 503.51 crore, as per exchange data.
“Rupee traded weak on the back of higher crude prices and firmer Dollar index above USD 90. The Federal Open Market Committee (FOMC) meeting will be keenly watched for next two days which shall give further clarification on spending by Fed.
“The range for rupee weakens between 73.10-73.60 in coming sessions,” said Jateen Trivedi, Senior Research Analyst at LKP Securities.
According to Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors, “It also seems that the central bank was present in the market at 73.18 levels as Nationalised Banks scalped up all inflows from the market. The inflows of the primary market did not affect the depreciation as the demand for dollars was so strong.”