There is pressure on the Indian currency due to increasing tension in the Middle East and continuous selling by foreign institutional investors. In Wednesday morning’s trade, the Indian Rupee weakened by 4 paise to 91.89 against the US dollar. However, forex traders say that the weakness of the dollar and the fall in global crude oil prices limited the sharp fall of the rupee to some extent.
Why the fall in rupee?
According to Anil Kumar Bhansali, Head of Treasury and Executive Director of Finrex Treasury Advisors LLP, the rupee had fallen to the level of 92.12 on Tuesday. However, due to the issuance of bonds by State Bank of India and sale of dollars by Reserve Bank of India around the level of 92, the rupee strengthened again. He said that the RBI was uncomfortable with the continuous fall of the rupee and did not want the rupee to fall further below the 92.00 level. In the Interbank Foreign Exchange Market, the rupee opened at 91.92 per dollar and later touched 91.89 per dollar, which shows a fall of 4 paise from the previous closing level. Earlier on Tuesday, the rupee, recovering from its record low, had strengthened by 36 paise and closed at 91.85 against the United States Dollar.
Relief from falling oil prices
Meanwhile, the US Dollar Index, which reflects the position of the dollar against six major currencies, fell by 0.04 percent to 98.78. Slight weakness was also seen in the domestic stock market. In early trade, BSE Sensex fell 96.12 points to 78,109.86, while Nifty 50 slipped 22.95 points to 24,238.65. In the global market, the price of Brent Crude fell 0.38 percent to $ 87.47 per barrel, which brought some relief. According to stock market data, foreign institutional investors (FIIs) sold shares worth Rs 4,672.64 crore on Tuesday.
