The Indian rupee depreciated by 15 paise to close at 94.65 (provisional) against the US dollar on Tuesday, marking a weak finish amid sustained demand for the American currency and cautious global market sentiment. Forex traders attributed the decline to month-end corporate import payments, a stronger dollar overseas, and ongoing risk-averse sentiment among investors.
In the interbank foreign exchange market, the rupee opened at 94.60 and fluctuated through the session before settling at 94.65. On Monday, the domestic currency had already slipped by 6 paise to 94.51, extending its losing streak for a third consecutive trading session. Analysts said persistent safe-haven flows into the US dollar and strong corporate demand for foreign currency continued to weigh on the rupee.
Market experts noted that month-end and quarter-end demand for dollars typically increases pressure on the rupee as importers, corporates, and banks square off their positions to meet payment obligations. According to analysts, this cyclical demand combined with global uncertainty has kept the dollar well supported against emerging market currencies, including the rupee.
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Despite the downward pressure, traders said losses were partially contained due to stable crude oil prices and expectations of potential intervention by monetary authorities. Brent crude futures were trading slightly lower at around $72.88 per barrel, helping limit import-related pressure on the currency. Meanwhile, the US dollar index rose 0.23 per cent to 101.34, reflecting continued strength in the greenback.
On the domestic front, equity markets also ended lower, with the Sensex falling 249.70 points to close at 76,478.67 and the Nifty declining 80.50 points to 23,865.75. Foreign institutional investors remained net sellers, offloading equities worth ₹1,350.1 crore, further adding to market caution. Analysts said the combination of equity outflows and currency demand has kept pressure on the rupee in recent sessions.
In broader economic developments, US Ambassador to India Sergio Gor said that a long-pending US-India trade agreement is in its final stages, with only minor issues remaining to be resolved. He added that the deal, under discussion for nearly 18 months, is expected to benefit both nations once concluded, although currency markets are likely to remain sensitive to global trade and monetary signals in the near term.
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