Rupee falls 10 paise to close at 82.40 against US dollar on forex outflows

Mumbai: The rupee pared its initial gains to close 10 paise down at 82.40 against the US dollar in a restricted trade on Tuesday.

At the interbank forex market, the local unit opened at 82.21 against the greenback. It witnessed an intra-day high of 82.02 and a low of 82.40 against the American currency during the session.

It finally ended at 82.40 against the US dollar, down 10 paise from its previous close of 82.30.

The dollar index, which measures the greenback’s strength against a basket of six currencies, rose 0.18 per cent to 112.24. Brent crude futures, the global oil benchmark, fell 0.27 per cent to USD 91.37 per barrel.

“Rupee continued to consolidate in a narrow range in the last few sessions despite volatility in major crosses. Reaction on the rupee remained muted even as the dollar fell marginally against its major crosses,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.

Risk on sentiment got a boost after Britain’s new finance minister scrapped Prime Minister Liz Truss’s proposed tax cuts and reined in her energy subsidies, Somaiya said.

The focus will be on the industrial production number from the US and better-than-expected data could support the dollar, Somaiya said, adding that “we expect the USDINR(Spot) to quote in the range of 82.20 and 82.80.”

The Indian rupee fell on strong demand for dollars from oil companies and other importers looking to hedge near-term payments, said Sriram Iyer, Senior Research Analyst at Reliance Securities.

Earlier in the session the local unit tested an intraday high of 82.0350 aided by stronger risk appetite after the dollar fell overnight and weakness in the oil prices. However, gains were short-lived.

Most emerging market and Asian peers were weaker this Tuesday afternoon session amid recessionary fears.

In the overseas markets, the dollar index recouped from earlier losses after Sterling gave up most of its gains after the Financial Times reported that the Bank of England will again delay its plans to sell some of its portfolio of bonds back into the market

On the domestic equity market front, the BSE Sensex ended 549.62 points or 0.94 per cent higher at 58,960.60 points, while the broader NSE Nifty gained 175.15 points or 1.01 per cent to 17,486.95.

Foreign institutional investors (FIIs) were net sellers in the capital markets, as they offloaded shares worth Rs 153.40 crore on Tuesday, according to exchange data.