Rupee falls 17 paise to 83.23 against dollar on foreign fund outflows

The rupee depreciated 17 paise to 83.23 against the US dollar in early trade on Tuesday, as a strong dollar and sustained foreign fund outflows weighed on investor sentiment.

Forex traders said a weak trend in domestic equities also dented investor sentiment.

At the interbank foreign exchange, the domestic unit opened at 83.21, then touched 83.23, registering a decline of 17 paise over its last close.

On Friday, the rupee appreciated 13 paise to settle at 83.06 against the US dollar.

On Monday, the domestic forex market was closed on account of Mahatma Gandhi Jayanti.

According to CR Forex Advisors MD, Amit Pabari, in response to potential risks, particularly the rupee’s vulnerability against the dollar, the RBI has engaged in strategic selling of dollars through public sector banks in recent trading sessions.

The intervention is expected to maintain a relatively stable trajectory for the rupee until the upcoming monetary policy decision on October 6, Pabari added.

The RBI Governor-headed six-member Monetary Policy Committee (MPC) is scheduled to meet for three days beginning October 4. Governor Skhatikanta Das will announce the decision on Friday (October 6).

Meanwhile, the dollar index rose 0.20% to 107.11.

Brent crude futures, the global oil benchmark, fell 0.90% to $89.89 per barrel.

In the domestic equity market, the 30-share BSE Sensex was trading 407.84 points or 0.62% lower at 65,420.57. The broader NSE Nifty fell 120.20 points or 0.61% to 19,518.10.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday, as they offloaded shares worth ₹1,685.70 crore, according to exchange data.

Meanwhile, the country’s foreign exchange reserves declined by $2.335 billion to $590.702 billion for the week ended September 22, the Reserve Bank said on Friday.

In the previous week, the overall reserves dropped by $867 million to $593.037 billion.