Rupee drops 20 paise to 70.92 vs USD amid weak GDP, rising crude

The rupee weakened by 20 paise to close at 70.92 against the US dollar Friday amid strengthening of the American currency and rising crude oil prices.

Forex traders said slower GDP, higher crude oil prices, and faltering trade talks between the US and China weighed on the domestic currency.

At the Interbank Foreign Exchange (forex) market, the rupee opened lower at 70.75 and fell further to touch the day's low of 70.99.

It finally ended at 70.92 per dollar, down by 20 paise against its previous close.

On a weekly basis, the domestic currency registered a gain of 22 paise.

The rupee had rebounded by 52 paise to close at 70.72 against the US dollar Thursday as sentiments revived on signs of de-escalation of tensions between India and Pakistan.

"India rupee declines on slower growth number, higher crude oil price and faltering trade talks between US and China," said V K Sharma, Head PCG & Capital Markets Strategy, HDFC Securities.

India's economic growth slipped to a five-quarter low of 6.6 per cent in October-December period of 2018-19, mainly due to poor performance of farm, mining and manufacturing sectors, official data showed Thursday.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.05 per cent to 96.20 after a strong US GDP data which was followed by a surprise bounce in Chinese factory activity.

Meanwhile, foreign investors (FIIs) remained net buyers in the capital markets, putting in Rs 198.38 crore on a net basis Friday, as per provisional data.

Brent crude futures, the global oil benchmark, rose 0.15 per cent to USD 66.41 per barrel.

Market benchmark Sensex Friday rose over 196 points to end at 36,064 amid signs of easing tensions between India and Pakistan. The NSE Nifty, after hitting a high of 10,877.90, closed at 10,863.50, up 71 points, or 0.66 per cent.

Meanwhile, the Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee against the dollar at 70.9696 and against euro at 80.7161. The reference rate for the rupee against the British pound was fixed at 94.0868 and against 100 Japanese yen at 63.49.