Mumbai, Jun 17 (PTI) The rupee declined 30 paise to close at 86.34 against the greenback on Tuesday, weighed down by a rise in global crude oil prices amid the escalating Iran-Israel war and a strengthening dollar.
Weak sentiments in the domestic equity markets put further pressure on the rupee, according to forex traders.
At the interbank foreign exchange, the rupee opened at 85.96 against the US dollar and traded in the range of 85.89-86.34. It finally settled at 86.34, down 30 paise from its previous close.
The rupee had closed at 86.04 against the rupee on Monday.
“As the rupee closes below 86.20, we can expect it to fall to 86.70 levels before any recovery. Dollar selling has been restricted for now with the war and is taking a toll on risk, and the greenback is getting bought as the tariff issue becomes secondary. Trump also said pharma tariffs will be coming soon, spooking pharma stocks of India and FPIs selling continuously,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
“Conflicts in Europe and the Middle East have intensified. The US has an unsustainable debt while there is unrest due to the deportation of illegal immigrants in the US. All negative factors have been helpful in keeping risk assets away, taking the rupee lower as it closed at 86.24,” he said, adding that the rupee could be in the range of 85.80-86.50 on Wednesday.
The prices of Brent crude — the global oil benchmark — rose 1.60 per cent to 74.40 per barrel in futures trade after rising sharply over the past few days, owing to the escalating Israel-Iran conflict.
In the domestic equity market, the 30-share BSE Sensex declined 212.85 points to settle at 81,583.30, while Nifty was down 93.10 points to 24,853.40.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was up 0.20 per cent to 98.19.
According to the monthly data released by the Ministry of Statistics & Programme Implementation on Monday, the rate of unemployment in the country rose to 5.6 per cent in May from 5.1 per cent in April this year, mainly due to seasonal variation.
Foreign institutional investors (FIIs) bought equities worth Rs 1,482.77 crore on a net basis on Tuesday, according to exchange data. PTI BAL BAL
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