Rupee falls 7 paise to settle at 83.35 against US dollar

The rupee declined 7 paise to close at 83.35 (provisional) against the US dollar on Friday as a strengthening American currency overseas and a selloff in domestic equities weighed on the local unit. Besides, rising crude prices in the international market and risk-averse sentiment dragged the local unit down, forex traders said.

At the interbank foreign exchange market, the local unit opened strong at 83.30 and moved in the range of 83.30–83.36 during the session. The local currency finally settled at 83.35 (provisional) against the dollar, registering a fall of 7 paise from its previous close. 

In the previous session, the rupee closed at 83.28 against the US dollar. "The Indian rupee declined slightly on weak domestic markets and a surge in crude oil prices. We expect the rupee to trade slightly weak on renewed geopolitical tensions in the Middle East and weakness in domestic equities.

"Rising crude oil prices and FII outflows may further put pressure on the rupee. However, any intervention by the RBI may support the rupee at lower levels. We expect USDINR to trade in the range of 83.10–83.60," Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas, said.

Brent crude futures, the global oil benchmark, rose 0.38 per cent to USD 89.35 per barrel. The dollar index, which gauges the greenback's strength against a basket of six currencies, increased 0.05 per cent to 105.49. 

On the domestic equity market front, Sensex slumped 609.28 points, or 0.82 per cent, to settle at 73,730.16, and Nifty declined 150.40 points, or 0.67 per cent, to close at 22,419.95.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Thursday as they offloaded shares worth Rs 2,823.33 crore, according to exchange data.