Rupee tumbles against US dollar in early trade

Foreign institutional investors were net buyers in the capital market.

The rupee depreciated 24 paise to 73.76 against the US dollar in opening trade on Thursday tracking muted domestic equities and strengthening American currency.

At the interbank forex market, the local unit opened on a weak note at 73.70, then fell further to 73.76, registering a fall of 24 paise over its last close.

On Wednesday, the rupee had strengthened by 12 paise to 73.52 against the US dollar.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.32% to 93.51.

Meanwhile, the Federal Reserve concluded its two-day policy meeting on Wednesday.

“The US Federal Reserve said it would keep the policy accommodative until inflation moderately overshot 2% for some time. Most Fed members see the federal funds rate at 0 per cent until at least 2023,” said Abhishek Goenka, Founder and CEO, IFA Global.

“With no major surprises from the Fed policy and the US dollar broadly stable globally, the rupee should continue to trade the 73-74 range a while longer,” Mr. Goenka said.

Mr. Goenka further said that “while several inflows are queued up, we expect the RBI to continue accumulating reserves and that should limit down side. The yuan is continuing to strengthen and that should limit USD strength against Asian currencies.”

On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 124.94 points lower at 39,177.91 and the broader NSE Nifty fell 31.60 points to 11,572.95.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth ₹264.66 crore on a net basis on Wednesday, according to provisional exchange data.

Brent crude futures, the global oil benchmark, fell 1.07% to $41.77 per barrel.

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