Rupee Declines 69 Paise To 95.17 Against US Dollar: Why Is Indian Currency Falling Today, May 11?

The Indian rupee on Monday declined 69 paise to trade past the 95-level at 95.17 against the US dollar in the morning. The fall in the domestic currency comes on account of a stronger dollar and costlier crude oil, after US President Donald Trump rejected Iran’s response to the US’s peace proposal.

A strengthening US dollar and steep FPI outflows further pressured the local unit, according to forex traders.

At the interbank foreign exchange, the rupee opened at 94.97 against the US dollar before inching up to 95.17, down 69 paise against the previous close of 94.48.

Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said, “The decline is mainly on account of higher dollar index and costlier oil. Equity indices

were down due to risk-off sentiment as Trump has said that the proposals submitted by Iran are not acceptable.”

He also said that after Trump rejected Iran’s response to the US Peace proposal, Brent oil rose higher, dollar index also higher and risky assets lower. Israeli attacks on Lebanon continued while Hezbollah said it struck Israeli army camps with drones while the UAE also intercepted drones from Iran.

“Thus the war continues keeping oil prices higher and accordingly rupee opened lower than Friday’s close. On Friday, the Reserve Bank of India (RBI) was present near to 94.70 levels taking the closing of the rupee higher to 94.48,” he said.

Meanwhile, the US dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 98.12, up 0.23 per cent. Brent crude, the global oil benchmark, rose sharply by 4.17 per cent to $105.5 per barrel in futures trade.

On the domestic equity market front, at around 9:50 am, the BSE Sensex was down 1,047 points at 76,280, while the Nifty 50 declined 293 points to 23,882.