Rupee Depreciates by 18 Paise Against the Dollar in Early Trade Today

Mumbai, July 29: The Indian rupee opened down on Tuesday, depreciating by 18 paise to 86.88 against the US dollar in morning trade due to strong month-end dollar demand coupled with continued foreign fund outflows.

Forex traders indicated a bearish outlook for the domestic currency in the near term.

Importer Demand and Equity Sentiment Weigh on Rupee

At the interbank foreign exchange market, the rupee opened at 86.76 and slipped to a low of 86.88, down from its previous close of 86.70 on Monday. The domestic currency continued to face pressure as importers sought dollars for monthly settlements, thereby strengthening the greenback’s position.

Muted cues from the domestic equity market and sustained selling by foreign institutional investors (FIIs) further dragged the rupee lower.

Dollar and Crude Movement

The US dollar index, which tracks the currency against a basket of six major peers, edged higher by 0.01 percent to 98.64. Meanwhile, Brent crude prices rose marginally by 0.04 percent to $70.07 per barrel, supported by easing tariff tensions and optimism surrounding future energy demand due to the progress of trade agreements.

FII Outflows and RBI Intervention

FIIs continued their selling spree, pulling out Rs 6,082.47 crore worth of Indian equities on Monday, according to exchange data. Market participants observed that while the Reserve Bank of India (RBI) appears to be intermittently defending the rupee, it has allowed a gradual depreciation trend.

Equities Trade Flat

On the equity front, benchmark indices were trading flat in early trade. The BSE Sensex rose 51.09 points or 0.06 percent to 80,942.11, while the NSE Nifty gained 18.30 points or 0.07 percent to 24,699.20, offering limited support to the rupee.

The rupee remains at risk of further downside, with market participants eyeing 86.90 as a potential one-month low in the near term.

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