The rupee declined by 26 paise to 82.49 (provisional) against the US dollar on Tuesday amid stronger dollar, negative sentiment in the domestic equity market and unabated foreign fund outflows.
At the interbank foreign exchange, the domestic unit opened lower at 82.27 against the dollar and traded between the range of 82.24 and 82.50 during intra-day. It finally settled at 82.49 (provisional) against the American currency.
This is the second consecutive day of decline in the Indian currency. On Monday, the rupee settled at 82.23 against the US dollar.
Jateen Trivedi, VP Research Analyst at LKP Securities, attributed the fall in rupee to the spillover fears after the collapse of the Silicon Valley Bank in the US.
“The Rupee fall continued as the Silicon Valley Bank in the US has spread concerns over the spillover fears after its collapse and in line with Asian peers. Rupee this time, fell below 82.48 levels which were last seen on 3rd March 23. The ripple effect can keep the forex market into continued volatile sessions,” he said and projected the range for rupee between 82.20-82.75 in further trades.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies rose 0.26 per cent to 103.86.
Global oil benchmark Brent crude futures fell 2.30 per cent to $78.91 per barrel.
On the domestic equity market front, the 30-share BSE Sensex fell 337.66 points or 0.58 per cent to 57,900.19 points while the broader NSE Nifty declined 111.00 points or 0.65 per cent to 17,043.30 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday as they offloaded shares worth Rs 1,546.86 crore, according to exchange data.
The collapse of two banks in the US, Silicon Valley Bank and Signature Bank, has raised concerns about the health of the financial system even as American regulators are taking steps to control the situation. Against this backdrop, some analysts also feel that the US Federal Reserve might opt for a slower interest rate hike even as inflation remains high.
On the domestic front, the wholesale price-based inflation declined to over two-year low of 3.85 per cent in January on easing prices of manufactured items, fuel and power, even though food articles remained expensive. This is the ninth straight month of decline in the rate of wholesale price-index (WPI) based inflation, according to the government data released on Tuesday.