The Indian rupee declined by 3 paise to 92.43 against the US dollar in early trading on Wednesday, reflecting pressure from a stronger dollar and continued foreign investor outflows.
At the interbank foreign exchange market, the rupee opened at 92.42 against the greenback before slipping further to 92.43 during the morning session.
Forex traders said the strengthening of the US dollar in international markets has affected emerging market currencies, including the rupee. Increased demand for the dollar from importers and investors has also contributed to the weakening of the domestic currency.
Foreign institutional investors have been withdrawing funds from Indian markets in recent sessions, which has added pressure on the rupee. When foreign investors sell assets in the domestic market, they typically convert rupees into dollars, increasing demand for the US currency.
However, the rupee’s losses were limited due to supportive trends in domestic markets. Indian stock markets opened higher, helping stabilise investor sentiment and preventing a sharper decline in the currency.
Lower global crude oil prices also helped cushion the rupee. As India relies heavily on imported crude oil, a fall in prices reduces pressure on the country’s trade balance and provides some support to the currency.
In the previous session, the rupee had closed at 92.40 after touching an intraday low of 92.47 against the US dollar. Analysts say the currency has been moving within a narrow band in recent days.
Also Read: Government makes 60% of flight seats free
