Rupee Drops 4 Paise to 90.24 Against US Dollar in Early Trade
US intervention in Venezuela boosts demand for dollar; Sensex down 135 points, forex reserves rise
Mumbai, Jan 5: The Indian rupee opened weak on Monday, falling 4 paise to 90.24 against the US dollar in early trade, as geopolitical uncertainties triggered by the US operation in Venezuela fuelled demand for the American currency.
At the interbank forex market, the rupee opened at 90.21/USD and slipped further to 90.24/USD in early deals. On Friday, the rupee had settled lower by 22 paise at 90.20/USD.
The US dollar index, which measures the greenback against a basket of six major currencies, rose 0.36% to 98.50, reflecting stronger dollar demand amid the geopolitical developments.
Traders noted that while lower crude oil prices could provide some cushion, the rupee is expected to remain under pressure in the near term due to global uncertainties. Brent crude futures were slightly lower at USD 60.70 per barrel.
Domestic markets and reserves
Domestic equities reflected caution, with the Sensex down 135.81 points to 85,626.20 and the Nifty slipping 25.75 points to 26,302.80 in early trade. Foreign institutional investors (FIIs) were net buyers on Friday, investing Rs 289.80 crore in equities.
Meanwhile, the Reserve Bank of India (RBI) data showed India’s forex reserves rose by USD 3.293 billion to USD 696.61 billion in the week ending December 26, following a USD 4.368 billion increase in the previous week.
Geopolitical risks, coupled with global market volatility, continue to influence the rupee-dollar exchange rate and domestic market sentiment, keeping traders on alert.
