Rupee Falls 8ps To 86.96/$

Mumbai: Rupee depreciated 8paise to close at 86.96 against US dollar weighed down by sustained foreign fund outflows and an uptick in the US Dollar index. Forex traders said there is a negative bias for the USD-INR pair as foreign investors continue to sell domestic equities and the RBI support is tapering off slowly. At the interbank foreign exchange, the rupee opened at 86.94 and touched the high of 86.91 against the greenback during intraday. It also touched the low of 86.98 before ending the session at 86.96 against the dollar, logging a loss of 8paise from its previous close. On Monday, the rupee depreciated 17paise to close at 86.88 against the US dollar.

Traders said disappointing trade deficit data from the domestic markets too pressurised the rupee. India’s exports declined for the third month in a row in January, falling by 2.38 per cent year-on-year to $36.43 billion, while the trade deficit widened to $22.99 billion in the month. Imports rose by 10.28 per cent year-on-year to $59.42 billion in January due to an increase in gold shipments, according to the Commerce Ministry data.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 106.95, higher by 0.35 per cent. In the domestic equity market, the 30-share BSE Sensex declined 29.47 points, or 0.04 per cent, to settle at 75,967.39, while the Nifty fell 14.20 points, or 0.06 per cent, to 22,945.30 points. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,937.83 crore in the capital markets on net basis on Monday, according to exchange data. “We expect the rupee to trade with negative bias amid weak domestic equities and a recovery in the US dollar.