Dollar vs Rupee: Rupee fell by 17 paise against dollar, closed at lowest level at 85.91

Mumbai: The rupee fell by 17 paise to its all-time low of 85.91 against the US dollar for the second consecutive trading session on Wednesday. This is a big fall in the rupee amid rising crude oil prices and strengthening of the American currency. Forex analysts said subdued sentiment in domestic stock markets and continued capital outflows by foreign institutional investors also weighed on the rupee. At the same time, investors remained cautious about the weak forecast of economic growth by the government.

The rupee opened at 85.82 in the interbank foreign exchange market. It closed at 85.91 per dollar, down 17 paise from its previous close. On Tuesday, the rupee fell by six paise and closed at 85.74 per dollar.

Rupee fell due to dollar strength

Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP, said the fall was due to the strengthening of the US dollar. This was boosted by positive economic indicators from the US, including strong labor market data and increased activity in the services sector. These factors have led to an increase in US bond yields, making the dollar more attractive to investors. In response to this, the Reserve Bank of India has intervened through public sector banks to mitigate the rupee losses, he said.

Dollar index increased by 0.35 percent

Despite these efforts, the rupee's exchange rate slide reflects broader concerns about India's economic growth and capital flows. Meanwhile, the dollar index, which gauges the US dollar's position against six major currencies, rose 0.35 per cent to 108.76. The yield on 10-year US bonds also remained high at 4.67 percent amid the possibility of the Federal Reserve delaying interest rate cuts. Global oil benchmark Brent crude rose 0.90 percent to $77.74 per barrel in futures trade.

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The 30-share BSE Sensex fell 50.62 points to close at 78,148.49. National Stock Exchange's Nifty fell marginally by 18.95 points to 23,688.95 points. According to stock market data, foreign institutional investors (FIIs) were net sellers in the capital market. He sold shares worth a net Rs 3,362.18 crore on Wednesday.