Rupee falls 18 paise to close at 82.85 against U.S. dollar

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| Photo Credit: RAGHUNATHAN S.R.

The rupee fell 18 paise to close at 82.85 (provisional) against the U.S. dollar on May 22, weighed down by a strong greenback in the overseas market.

However, a firm trend in domestic equities and sliding crude prices in international markets restricted the rupee’s loss, forex traders said.

At the interbank foreign exchange, the domestic unit opened at 82.80 against the dollar, and finally settled at 82.85 (provisional), down 18 paise from its previous close.

During the day, the rupee touched a high of 82.70 and a low of 82.85 against the greenback.

On May 19, the rupee had settled at 82.67 against the dollar.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.09% to 103.10.

Brent crude futures, the global oil benchmark, declined 0.16% to $75.46 per barrel.

The rupee depreciated today to the lowest levels since February 2023 on underlying strength in the greenback and buying of Dollars by the RBI to shore up its forex reserves, said Anuj Choudhary – Research Analyst, Sharekhan by BNP Paribas.

However, the weak tone in crude oil prices and positive domestic equities cushioned the downside. U.S. Dollar eased slightly on a dovish statement by Fed Chair Jerome Powell and debt ceiling talks being stalled.

“We expect the rupee to trade with a negative bias on risk-off sentiments amid concerns over the debt ceiling talks. However, expectations that crude oil prices may decline further amid sluggish demand from China may prevent a sharp fall in the rupee.

“Dovish hints by Powell may also support the rupee at lower levels. Market participants may remain cautious ahead of FOMC minutes this week. We expect the USD/INR spot to trade between 82.40 to 83.30 in the near term,” Mr. Choudhary added.

On the domestic equity market front, the 30-share BSE Sensex closed 234.00 points or 0.38% higher at 61,963.68 points. The broader NSE Nifty advanced 111.00 points or 0.61% to 18,314.40 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on May 19 as they offloaded shares worth ₹113.46 crore, according to exchange data.

Meanwhile, rising for the second consecutive week, India’s forex kitty jumped $3.553 billion to $599.529 billion for the week ended May 12, the RBI said on May 19.

The overall reserves had jumped by $7.196 billion to $595.976 billion for the previous week.