Rupee ends at four-month low of 86.82/$ as dollar gains, FPI outflows weigh

Indian Rupee today: The domestic currency closed 15 paise lower at 86.82 against the dollar on Tuesday, the lowest level since March 17 this year

The Indian Rupee held steady on Tuesday after opening at a four-month low, as gains in the US dollar and continued equity selling by Foreign Portfolio Investors (FPIs) weighed on the currency.

 

The domestic currency closed 15 paise lower at 86.82 against the dollar on Tuesday, the lowest level since March 17 this year, according to Bloomberg. The local unit has depreciated 1.2 per cent so far this month and 1.4 per cent in this calendar year so far. 

 

The week is expected to remain volatile with the US inflation, trade, and economic data coming along with the Federal Reserve's interest rate decision. The Fed is expected to hold rates steady this Wednesday, according to Bloomberg.  

 

Persistent dollar demand from FPIs has weighed heavily on the currency, analysts said. 

 

FPIs have sold Indian equities for the sixth straight session in the secondary market, according to data from NSE. On Monday, FPIs offloaded stocks worth ₹6,082.47 crore, the biggest selloff since May 30 this year. In the last six sessions, global funds have sold stocks worth ₹19,635.38 crore in the secondary market. 

 

Although the Reserve Bank of India (RBI) appears to be intervening intermittently, it is allowing a gradual depreciation of the currency, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said. "Meanwhile, equities have not offered any support, with the Nifty declining consistently over the past four sessions from its peak near 25,200."

 

Meanwhile, the dollar steadied on Tuesday after climbing the most since May in the previous session on optimism over the trade deal between the US and the European Union (EU). The dollar index is poised for the best month this year, with the measure of the greenback against a basket of six major currencies, up 0.12 per cent at 98.74.

 

In commodities, crude oil prices continued their advance after the EU and the US reached a trade agreement. Brent crude price was up 0.47 per cent at 70.37 per barrel, while WTI crude prices were higher by 0.54 per cent at 67.07, as of 3:40 PM IST.