Indian Rupee vs Dollar: Foreign fund outflows hamper domestic currency rate

Foreign investors appear to have started removing their money from Indian markets, as there is a massive outflows recorded since start of February 2018 in both equity, debt and hybrid market. This has affected Indian rupee against US benchmark dollar index, as the American unit today strengthened amid the outflows, which resulted in the domestic currency on negative note. 
 
At around 1148 hours, Indian Rupee was trading at 64.935, higher by 0.010 points or 0.02%, against dollar. However, the performance of INR has been very volatile today, as in early trade, it was lower by 2 paisa to 64.91. 
 
In previous day session, the rupee had gained 7 paise to close at a one-week high of 64.89 against the US currency due to sustained dollar selling by exporters and banks.
 
Forex dealers in a Reuters report stated that increased demand for the US currency from importers and the greenback's gains against other currencies overseas after news of potential US tariff exemptions put pressure on the rupee.
 
Although FPI overall inflows yesterday stood at Rs 569.84 crore, yet so far in this month, the investors have removed their money. In one week of March 2018, there is an outflow of Rs 3,687 crore, compared to outflows of Rs 11,288 crore in February 2018. However, the month of January 2018 witnessed inflows of Rs 22,272 crore from foreign investors.