Rupee Starts On A Weak Note, Slides 10 Paise To 94.66 Against US Dollar In Early Trade

Mumbai: The Indian rupee weakened against the US dollar in early trade on Tuesday, September 8, as rising crude oil prices and escalating US-Iran tensions weighed on investor sentiment.

The rupee fell 10 paise to 94.66 against the US dollar, compared with its previous close of 94.56. At the interbank foreign exchange market, the domestic currency opened stronger at 94.49 before slipping to 94.66.

On Monday, the rupee had declined 13 paise against the American currency.

RBI Intervention Limits Rupee Fall

Forex traders said continued RBI dollar sales and strong foreign-currency inflows under special schemes helped contain the rupee's losses despite pressure from elevated oil prices.

Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, said the RBI's intervention has played an important role in preventing higher crude prices from causing a sharper depreciation in the rupee.

He expects the USD-INR exchange rate to remain in the 94.00-94.75 range as the RBI continues to sell dollars.

Investors are now awaiting US and India inflation data, along with the US Federal Reserve's FOMC meeting on September 16, for further cues.

Brent Crude Climbs Above $97

Brent crude, the global oil benchmark, rose 0.63% to $97.61 per barrel in futures trade amid escalating US-Iran tensions and concerns over possible disruption to oil flows through the Strait of Hormuz.

Meanwhile, the dollar index, which measures the greenback against six major currencies, slipped 0.37% to 98.80.

Domestic equity markets also traded sharply lower. The Sensex dropped 382.25 points to 75,750.56, while the Nifty fell 97.80 points to 23,681.80 in early trade.

Foreign institutional investors were net buyers of Indian equities on Monday, purchasing shares worth Rs 280.13 crore, according to exchange data.