Rupee Falls 16ps To 86.87/$

Mumbai: The rupee depreciated 16paise to close at 86.87 against the US dollar on Monday, weighed down by significant foreign fund outflows and a recovery in the US dollar index from intraday lows. Forex traders said the Indian rupee is trading with a negative bias as foreign banks went on a dollar-buying spree and importers scrambled to secure dollars, as they feared further depreciation amid global uncertainty.

At the interbank foreign exchange, the rupee opened at 86.70 and touched the high of 86.68 against the greenback during intraday. It also touched the low of 86.88 before ending the session at 86.87 against the dollar, logging a loss of 16paise from its previous close. On Friday, the rupee extended its recovery and settled 21paise higher at 86.71 against the US dollar. “Indian rupee declined on a weak tone in the domestic markets and a recovery in the US dollar index from intraday lows.

However, weak tone in crude oil prices and a decline in US treasury yields cushioned the downside,” said Anuj Choudhary – Research Analyst at Mirae Asset Sharekhan. Traders may take cues from speeches by Federal Open Market Committee (FOMC) members. “We expect the rupee to trade with negative bias amid weakness in the domestic equities and FII outflows.

Overall strength in the US dollar may also weigh on the rupee. However, any further decline in the US treasury yields or any further intervention by the RBI may support the rupee at lower levels,” Choudhary added. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.14 per cent higher at 106.85.