Rupee declines 4ps to 86.72/$

Mumbai: The rupee dropped 4paise to 86.72 against the US dollar on Monday amid a steep fall in the domestic equity markets and a rise in Brent crude prices. However, a flat greenback against major currencies prevented further decline in the domestic unit, according to forex traders. At the interbank foreign exchange, the local unit opened at 86.58, went up 10paise from Friday’s close of 86.68, but gave way through the session. It eventually settled at 86.72, 4paise lower than the previous day’s close. “The RBI is all set to do a 3-year buy/sell swap of $10 billion on February 28 to ease the tightening liquidity position, thus bringing premiums further down. Exporters may sell the cash dollars requirement on all upticks while importers may buy good dips,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading flat at 106.61. “The dollar has slid more than 3 per cent from its January peak on tariff issues leaving little appetite for traders to load up on fresh dollar holdings. Data on Friday showed business activity nearly stalled in February... as surveys showed business and consumers were increasingly rattled by the Trump administration policies,” Bhansali said.

The latest RBI data released on Friday showed India’s forex reserves dropped $2.54 billion to $635.721 billion in the week ended February 14, snapping the three-week streak of increase.