Rupee falls 7 paise to close at 81.88 against US dollar

the rupee trimmed initial gains to settle 7 pounds, down at 81.88 against the US currency on Tuesday, as The rise in crude oil prices The muted trend in local stocks affected investor sentiment.

Forex traders said the strengthening of the US currency in overseas markets further affected investor sentiment.

In the interbank foreign exchange market, the local unit opened at 81.74 per dollar and touched an early high of 81.67 in initial trades.

However, the local unit pared initial gains and closed the day at 81.88 (tentative), down 7 piasters from its previous close.

On Monday, the rupee settled at 81.81 against the dollar.

Also read: RBI’s dependence on forex intervention gains needs to be looked at closely

The dollar index, which measures the greenback’s strength against a basket of six currencies, rose 0.12 percent to 101.46.

Brent crude futures, the global oil benchmark, fell marginally by 0.18 percent to $82.59 a barrel.

“In the wake of strong delivery of western and Asian currencies, the Indian rupee opened a gap, but the Reserve Bank of India may have intervened in the market along with demand for dollars by hedgers erasing gains,” said Dilip Parmar, Research Analyst, HDFC Securities.

Parmar said foreign money inflows and a decline in the dollar are likely to benefit the rupee, but a sharp rise may not be appropriate when we are holding a large amount of foreign exchange reserves ($600 billion).

On the domestic stock market front, 30-share BSE Sensex closed 29.07 points or 0.04 percent, at 66,355.71. the widest NSE Nifty has a lead of 8.25 points or 0.04 percent at 19,680.60.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday as they unloaded shares worth Rs 82.96 crore, according to exchange data.