Rupee falls 48 paise to close at 81.26 against U.S. dollar

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| Photo Credit: Reuters

The rupee depreciated by 48 paise to close at 81.26 (provisional) against the U.S. dollar on November 14, tracking the recovery in the American currency and a muted trend in domestic equities.

Forex traders said rising crude oil prices also weighed on investor sentiments.

At the interbank foreign exchange market, the local unit opened on a strong note at 80.53, but pared gains and finally settled at 81.26 against the American currency, registering a fall of 48 paise over its last close.

On Friday, the rupee appreciated by 62 paise to close at 80.78 against the dollar.

“Indian Rupee depreciated on recovery in US Dollar and weak domestic markets. However, Rupee opened higher on upbeat macroeconomic data,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

India’s industrial production expanded by 3.1 per cent in September, boosted by manufacturing, mining and power sectors, according to official data released on Friday.

“Overall weakness in the Dollar amid rising expectations of the not-so-aggressive Federal Reserve may also support the Rupee at lower levels. Sustained FII inflows may also support Rupee. However, higher crude oil prices may cap sharp upside,” Choudhary added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.59% to 106.91.

Global oil benchmark Brent crude futures declined 0.63% to $95.93 per barrel.

On the domestic equity market front, the 30-share BSE Sensex fell 170.89 points or 0.28% to end at 61,624.15, while the broader NSE Nifty declined 20.55 points or 0.11% to 18,329.15.

Foreign Institutional Investors (FIIs) were net buyers in capital markets as they purchased shares worth ₹3,958.23 crore on Friday, according to exchange data.

On the domestic macroeconomic front, the wholesale price-based inflation declined to a 19-month low of 8.39% in October, on easing prices of fuel and manufactured items.

Meanwhile, India’s foreign exchange reserves dropped by $1.087 billion to $529.994 billion in the week ended November 4 on a sharp decline in gold reserves, the Reserve Bank said on Friday.