Indian rupee slips 12 paise to 75.72 against US dollar in early trade

The rupee declined 12 paise to 75.72 against the US dollar in opening trade on Tuesday, as geopolitical tensions and higher domestic inflation weighed on investor sentiments.

Forex traders said sustained foreign fund outflows and elevated crude oil prices too weakened the rupee position.

At the interbank foreign exchange, the rupee opened at 75.60 against the US dollar, then slipped further to 75.72, registering a decline of 12 paise from the last close.

On Monday, the rupee slumped by 24 paise to close at an over nine-week low of 75.60 against the US currency.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.18 per cent to 96.19.

On the domestic macroeconomic front, the retail inflation rate breached the 6 per cent upper tolerance limit of the RBI for the first time in seven months in January, while the wholesale price index stayed in double-digits for the 10th month in a row.

"Growing worries about Russia-Ukraine tensions and its impact on crude oil and possible higher global interest rates scenario could cap appreciation bias," Sriram Iyer, Senior Research Analyst at Reliance Securities said.

Moreover, divergent policy outlooks of the RBI and the US Federal Reserve, higher domestic inflation and the inaction from the central bank to control it could also cap appreciation bias, Iyer noted.

Meanwhile, global oil benchmark Brent crude futures fell by 0.68 per cent to USD 95.82 per barrel.

On the domestic equity market front, the 30-share Sensex was trading 233.49 points or 0.41 per cent higher at 56,639.33 points, while the broader NSE Nifty advanced 48.35 points, or 0.29 per cent, to 16,891.15 points.

Foreign institutional investors remained net sellers in the capital market on Monday as they offloaded shares worth Rs 4,253.70 crore, as per stock exchange data.