At the interbank foreign exchange market, the local unit opened at 83.43 and lost further to 83.48 against the greenback, registering a fall of 4 paise from its previous close.
New Delhi: Amid the rising geopolitical tensions, the Indian Rupee has fallen by another 4 paisa to 83.48 against the US dollar due to strenghening of the US Dollar and an upward trend in crude oil prices overseas on Thursday. The local unit resisted the fall amid the unabated inflow of foreign capital but gave in to the pressure due to a muted trend in the domestic equity markets, forex traders said.
At the interbank foreign exchange market, the local unit opened at 83.43 and lost further to 83.48 against the greenback, registering a fall of 4 paise from its previous close.
On Wednesday, the rupee settled 1 paisa lower at 83.44 against the US dollar. “The local currency’s upward momentum was halted by a strong US dollar and rising crude oil prices in the international market,” said Anand James, Chief Market Strategist, Geojit Financial Services.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.02 per cent at 104.90. Brent crude futures, the global oil benchmark, advanced 0.02 per cent to USD 85.09 per barrel.
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In the domestic equity markets, the 30-share BSE Sensex fell 72.43 points, or 0.09 per cent, to 77,265.16 points. The broader NSE Nifty declined 30.25 points, or 0.13 per cent, to 23,485.75 points.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Wednesday, as they purchased shares worth Rs 7,908.36 crore, according to exchange data.
India To Gain As Global Oil Prices Decline
Oil prices declined for a third day in a row in the international market on Wednesday, despite geopolitical tensions, as the US Federal Reserve is not expected to reduce interest rates any time because of the high inflation rate.
Prices of the benchmark Brent crude have now come down to $82.28 a barrel from close to $84 a barrel at the end of last week. The US West Texas Intermediate crude (WTI) futures were trading at $78.02 on Wednesday indicating the further softening of prices.
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Since India imports close to 85 per cent of its crude requirement, the decline in oil prices reduces the country’s import bill and strengthens the rupee.
The Government has also helped to cut the country’s oil import bill by allowing the oil companies to buy Russian crude at discounted prices despite the pressures from Western countries to stop these purchases in the wake of the Ukraine war.
Russia has now emerged as the largest supplier of crude oil to India replacing Iraq and Saudi Arabia which occupied the top slot earlier. India has in fact become the largest purchaser of Russia’s seaborne oil which accounted for close to 38 per cent of India’s total oil imports in April.
In fact, India’s strategy of continuing to buy cheap oil from Russia has resulted in the saving of around $7.9 billion in the country’s oil import bill during the first 11 months of the fiscal year 2022-23 and also helped the country to lower its current account deficit.
(With inputs from agencies)
