India News | Rupee Slumps 31 Paise to 75.46 Against US Dollar in Early Trade

Mumbai, Feb 11 (PTI) The rupee declined 31 paise to 75.46 against the US dollar in opening trade on Friday, tracking overall Dollar strength after a larger-than-expected US inflation unleashed a wave of bets on aggressive rate hikes.

Forex traders said muted domestic equities, sustained foreign fund outflows and elevated crude oil prices weighed on the local unit.

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At the interbank foreign exchange, the rupee opened at 75.40 against the US dollar, then slipped further to 75.46, registering a decline of 31 paise from the last close.

On Thursday, the rupee had settled at 75.15 against the US dollar, after the Reserve Bank of India kept the benchmark lending rate unchanged and said it will continue with the accommodative stance.

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The RBI kept the benchmark lending rate unchanged for the 10th time in a row at 4 per cent. The Monetary Policy Committee decided to keep the reverse repo rate unchanged at 3.35 per cent.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.45 per cent to 95.98.

"The Indian Rupee could open weak against the dollar this Friday after another larger-than-expected increase in the US consumer prices, making it highly likely that the Federal Reserve would increase rates by 50 basis points next month. Treasury yields soared," said Sriram Iyer, Senior Research Analyst at Reliance Securities.

The US consumer price index jumped 7.5 per cent in the 12 months through January, the biggest year-on-year increase since 1982, topping expectations of a 7.3 per cent rise, Iyer noted.

The USD/INR Spot pair could trade in a broad range of 74.75-75.50 levels, he said.

Meanwhile, global oil benchmark Brent crude futures fell by 0.27 per cent to USD 91.16 per barrel.

On the domestic equity market front, the 30-share Sensex was trading 978.84 points or 1.66 per cent lower at 57,947.19 points, while the broader NSE Nifty declined 285.85 points, or 1.62 per cent, to 17,320.00 points.

Foreign institutional investors remained net sellers in the capital market on Thursday as they offloaded shares worth Rs 1,732.58 crore, as per stock exchange data.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)