MUMBAI, July 6: The rupee depreciated 20 paise to close at 95.38 (provisional) against the US dollar on Monday, as a strengthening greenback weighed on emerging market currencies.
At the interbank foreign exchange market, the rupee opened at 95.25 against the American currency and traded in a range of 95.22-95.48 during the session.
The rupee finally closed at 95.38 (provisional), down 20 paise from its previous close.
On Friday, the rupee appreciated 17 paise to close at 95.18 against the US dollar.
“Indian rupee declined as the US Dollar firmed up, as markets continue to price in one rate hike this year. However, positive domestic markets and weakness in crude oil prices supported the rupee,” said Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan.
Choudhary further added that “hedging demand from importers may cap sharp upside. Traders may take cues from ISM services PMI data from the US. USD/INR spot price is expected to trade in a range of 95.10 to 95.60”.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 101.12, up 0.26 per cent.
Brent crude, the global oil benchmark, was trading lower by 0.76 per cent at USD 71.57 per barrel in futures trade.
On the domestic equity market front, Sensex jumped 521.16 points to settle at 78,285.07, while Nifty rose 159.50 points to 24,430.35.
Foreign institutional investors turned net buyers, purchasing equities worth Rs 1,355.33 crore on a net basis on Friday, according to exchange data.
Forex traders said whenever fresh foreign inflows enter the country, the central bank is likely to use the opportunity to rebuild its reserve position rather than allowing the rupee to strengthen too much.
India’s forex reserves dropped USD 5.654 billion to USD 666.933 billion during the week ended June 26, the RBI said on Friday.
In the previous reporting week, the kitty jumped USD 963 million to USD 672.587 billion.
The kitty had expanded to an all-time high of USD 728.494 billion during the week ended February 27 this year before the onset of the West Asia conflict, which led to several weeks of a drop as the rupee came under pressure and the RBI had to intervene in the forex market through dollar sales. (PTI)
