Rupee Slips 9 Paise To 71.27 Against US Dollar

The rupee depreciated by 9 paise to close at 71.27 against the US dollar on Tuesday amid heavy selling in domestic equities and steady rise in crude oil prices. Forex traders said the rupee traded in a narrow range but was weighed down in the latter half of the session after reports emerged that the government might not be able to meet its disinvestment target.

At the interbank foreign exchange market, the domestic currency opened weak at 71.22 and later fluctuated between a high of 71.15 and a low of 71.29. The domestic unit finally settled at 71.27, showing a fall of 9 paise over its previous close of 71.18.

“Rupee continued to consolidate in a narrow range but was weighed down in the latter half of the session after reports that the government might not be able to meet its disinvestment target.

Some sources suggest that the government will not be able to finish the disinvestment process for BPCL as well as for Air India in the current fiscal year,” Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.

On the domestic market front, the 30-share BSE Sensex ended 181.40 points, or 0.44 per cent, lower at 41,461.26. Similarly, the broader NSE Nifty closed 48.20 points, or 0.39 per cent, down at 12,214.55.

“Overall prices still are little weak on back of nationalized banks buying on behalf of Oil importers who seems to be worried about the prices in Brent Crude futures steady above USD 66,” Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities. Brent futures rose 0.39 per cent to USD 66.65 per barrel.

“Indian rupee fluctuating between gains and losses so far today, in light of no fresh triggers and broadly subdued US dollar price action amid X-mas Eve light trading,” said V K Sharma, Head - PCG & Capital Market Strategy, HDFC securities. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose by 0.12 per cent to 97.77.

Foreign institutional investors (FIIs) sold shares worth Rs 114.38 crore on a net basis on Tuesday, according to provisional exchange data. The 10-year government bond yield was at 6.58 per cent.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.1699 and for rupee/euro at 78.8814. The reference rate for rupee/British pound was fixed at 92.6613 and for rupee/100 Japanese yen at 65.04.