Rupee tumbles 17 paise to 71.24 agaisnt dollar as India-Pakistan tensions flare up
The rupee dived 17 paise to close at 71.24 against the US dollar on Wednesday amid a flare-up of tensions between India and Pakistan
Rupee opened almost flat at 71.08
It then shuttled between a low of 71.49 and a peak of 70.94
The rupee marked second day of loss amid an escalation of tension with Pakistan and month-end dollar demands from oil importers
Mumbai: The rupee dived 17 paise to close at 71.24 against the US dollar on Wednesday amid a flare-up of tensions between India and Pakistan.
Firming crude oil prices, month-end dollar demand from oil importers and a weak sentiment at domestic equity markets weighed on the rupee, analysts said.
At the Interbank Foreign Exchange (forex) market, the domestic unit opened almost flat at 71.08. It then shuttled between a low of 71.49 and a peak of 70.94, before finally ending at 71.24, showing a loss of 17 paise.
The domestic currency had ended 10 paise lower at 71.07 to the US dollar on Tuesday.
The rupee marked "second day of loss amid an escalation of tension with Pakistan and month-end dollar demands from oil importers," V K Sharma, Head PCG & Capital Markets Strategy, HDFC Securities said.
The currency failed to take advantage of a weaker US dollar, he added.
Meanwhile, foreign investors (FIIs) remained net buyers in capital markets, putting in Rs 423 crore on a net basis Wednesday.
Brent crude futures, the global oil benchmark, climbed 1.17 percent to $65.97 per barrel.
The dollar index, which gauges the greenback's strength against a basket of six currencies, slipped 0.07 percent to 95.93 after the US Federal Reserve chief reiterated that policymakers will stay “patient”, and they are in “no rush to make a judgment” on future interest-rate moves.
The benchmark BSE Sensex surrendered early gains Wednesday to end in the negative terrain after a 600-point swing amid escalating cross-border tensions between India and Pakistan.
Investor sentiment took a beating after Pakistani fighter jets on Wednesday violated Indian air space in Jammu and Kashmir's Poonch and Nowshera sectors, following which the Indian forces retaliated.
Meanwhile, the Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee against the dollar at 71.1663 and against euro at 80.9668. The reference rate for the rupee against the British pound was fixed at 94.2152 and against 100 Japanese yen at 64.38.
The Reserve Bank of India on Friday raised the benchmark lending rate by 50 basis points, the fourth straight increase since May, as it extended its battle to tame stubbornly high inflation
On Thursday, the rupee plunged by 83 paise - its biggest single-day loss in nearly seven months - to close at 80.79, its previous record low
At the interbank foreign exchange market, the local currency opened at 80.27, then fell further to an all-time intra-day low of 80.95 against the American currency