Rupee Settles 10 Paise Lower At 71.17 Against US Dollar

Mumbai, Jan 25 (PTI) The rupee Friday weakened by 10 paise to close at 71.17 against the US dollar amid increasing demand for the greenback from exporters and heavy selling in domestic equities.

On a weekly-basis, however, the Indian currency registered a marginal gain of 2 paise. The rupee had registered losses in the previous two successive weeks.

Forex traders said concerns related to fiscal slippage weighed on the local unit.

At the Interbank Foreign Exchange (forex) market, the rupee opened higher at 71.03, but during the day it came under selling pressure. It finally finished at 71.17 per dollar, down by 10 paise against its previous close.

On Thursday, the rupee had gained 26 paise to end at 71.07 against the US dollar.

“Most of the Asian currencies gained against the American dollar on back of foreign fund inflows, while Indian rupee bucked the trend today after rating agency Moody’s flagged concerns related to fiscal slippage,” said V K Sharma, Head PCG and Capital Market Strategy, HDFC Securities.

Moody’s Investors Service Friday said the steps announced by the government to aid MSMEs and the measures being planned to support farmers will increase the risk of fiscal slippage and push deficit to 3.4 per cent of GDP in the current financial year.

“Markets continue to grapple with myriad concerns including political uncertainty, profit margins, global growth and China, US trade war,” said Sunil Sharma, Chief Investment Officer, Sanctum Wealth Management.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.23 per cent to 96.37.

Meanwhile, heavy selling in domestic equities also weighed on the rupee, but easing crude prices restricted the slide in the local unit to some extent.

The BSE benchmark Sensex gave up initial gains Friday and closed 169 points lower at 36,025.54. In similar movement, the broader NSE Nifty ended 69.25 points, or 0.64 per cent, down at 10,780.55.

Brent crude, the global oil benchmark, was trading lower at USD 61.03 per barrel, down by 0.10 per cent.

Meanwhile, foreign portfolio investors (FPIs) sold shares worth a net of Rs 94.45 crore, and domestic institutional investors (DIIs) purchased shares worth Rs 389.96 crore Thursday, provisional data showed.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.1051 and for rupee/euro at 80.4986. The reference rate for rupee/British pound was fixed at 93.2396 and for rupee/100 Japanese yen at 64.74.

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