Rupee falls 24 paise to close at 82.04 against the US dollar

The value of the rupee (INR) declined on Tuesday, breaching the crucial 82 level, as the dollar (USD) gained strength against major currencies and continued demand for dollars from public sector banks on behalf of Oil Marketing Company clients.

The Indian unit, which fell to its lowest level in two weeks, closed at 82.04 per dollar, down 24 paisa from the previous close at 81.80. In daily trading, the rupee tested the highest and lowest levels at 81.82 and 82.14 for the US dollar, respectively.

dollar purchases

Banks bought dollars on behalf of public sector oil companies, driving outflows. “There is a bullish trend for the dollar due to strong US non-farm payroll data and wage growth,” said Rama Chandra Reddy, Head of Treasury at Karur Visya Bank.

It may be pertinent to note that dollar purchases by oil marketers came ahead of the release of US retail inflation data due on Wednesday, even as Crude Oil fell, giving up some of the gains of the previous two trading sessions. The course of inflation will determine the future course of interest rate action by the US Federal Reserve.

USDINR closed at its highest level since April 24, said Anindya Banerjee, Vice President, Currency and Interest Rate Derivatives, Kotak Securities.

“Massive corporate dollar outflows pushed USDINR higher. In the near term, we expect USDINR to remain in the range of 81.75 and 82.30 immediately.

IFA Global Research, in a report, said the rupee opened almost flat at 81.83 and traded in a much wider range from 82.14 to 81.82 with a weak bias.

The local currency recorded its lowest level in two weeks, on the back of importer demand for the dollar, and traders stopped stimulating it, as it exceeded 82.

The dollar index was marginally higher at 101.7 as US CPI data came closer. The Euro (Euro) and the Swedish Krona (Swedish Krona) fell more than 0.3 percent against the US dollar,” according to the report.