NEWS
Dollar vs Rupee: Rupee collapses due to rise in crude oil prices and strengthening dollar, find out why it could not maintain its strength
Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said the rupee strengthened to 90.67, but the gains could not be sustained as the stock markets could not sustain their opening highs.
The rupee depreciates against the US dollar
Rupee vs. Dollar: The Indian rupee's strength, seen a day earlier, failed to sustain in the following trading day. On Tuesday, the second trading day of the week, began with a seven-paise drop to 90.96 against the US dollar. Rising global crude oil prices and a stronger dollar added pressure to the domestic currency.
Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said the rupee strengthened to 90.67, but the gains were not sustained as stock markets failed to hold on to their initial highs. He said the rupee did not appreciate significantly despite a favorable Supreme Court of the United States ruling, and importers and foreign portfolio investors bought dollars on every dip. He said the rupee could remain in the range of 90.60 to 91.00.
Why did the rupee fall?
According to forex traders, a weak opening in the domestic stock market put pressure on the rupee. However, buying by foreign investors helped arrest the sharp decline.
The rupee opened at 90.91 in the interbank foreign exchange market and slipped to 90.96, a decline of seven paise from its previous close. On Monday, the rupee had closed at 90.89, a gain of five paise. Meanwhile, the dollar index rose 0.11 percent to 97.81, reflecting the dollar's strength.
stock market crash
Domestic markets also showed weakness. The BSE Sensex fell 525.29 points to 82,769.37, while the Nifty 50 slipped 145.85 points to 25,567.15.
International benchmark Brent crude rose 0.85 percent to $72.10 per barrel, putting additional pressure on the rupee due to fears of rising import bills. According to stock market data, foreign institutional investors (FIIs) remained bullish on Monday, purchasing shares worth Rs 3,483.70 crore, providing some support to the market.
