Rupee declines by 8 paise to trade at 16-month low level

The rupee declined further by 8 paise to a fresh 16-month low level of 75.68 in early trade on Friday due to continued foreign found outflows and losses in the stock market.

At the interbank foreign exchange market, the rupee opened lower at 75.65 against the previous close of 75.60 and fell further to a low of 75.68, down by 8 paise, in early morning deals.

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The rupee had tanked to a 16-month low of 75.60 against the US dollar on Thursday due to unabated foreign fund outflows amid growing concerns over the Omicron virus and interest rate hike by the US Federal Reserve to rein in inflation.

The US consumer inflation data for November would be released later on Friday with experts expecting the consumer price index (CPI) to rise further. The retail inflation had risen to 6.2 per cent in October which was the sharpest increase in 31 years. Any hike in inflation would be seen as a case for tightening of monetary policy by the US Federal Reserve, which could lead to outflows of funds from emerging markets and riskier assets.

The US dollar index, which measures the greenback's strength against the basket of six currencies, edged down by 0.09 per cent at 96.18 in early trade.

Oil benchmark Brent crude was marginally down at USD 74.38 per barrel while oil for the Indian basket was quoted higher at USD 74.28 per barrel.

On the equity front, the 30-share index declined by 186.36 points or 0.32 per cent to 58,620.77 in opening trade. Similarly, the Nifty slipped 46.65 points or 0.27 per cent to 17,470.20.

Foreign investors withdrew Rs 1,585.55 crore on a net basis from Indian equities on Thursday, according to the exchange data.