Rupee declines 6 paise to close at 90.23 against US dollar

Mumbai, Jan 13 (PTI) The rupee declined 6 paise to close at 90.23 against the US dollar on Tuesday, as a rebound in crude oil and high metal prices, coupled with a cautious market environment, dented investor sentiments.

Forex traders said incessant outflow of foreign funds amid geopolitical tensions and weak equity markets also put pressure on the Indian currency.

At the interbank foreign exchange, the rupee opened at 90.24 and touched the intra-day low of 90.30 against the greenback. The currency ended the session at 90.23 against the dollar, down 6 paise from its previous close.

On Monday, the rupee ended 1 paisa higher at 90.17 against the US dollar.

Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan, said the rupee declined amid ongoing

geopolitical tensions and global risk aversion. Weak domestic markets, FII outflows and a surge in crude oil prices also pressurised the rupee.

“However, optimism on the India-US trade deal and rising odds of a rate cut amid weak labour market reports last week may support the rupee at lower levels. Any intervention by the central bank may also support the rupee,” Choudhary said.

Market sentiment improved after the new US envoy to India, Sergio Gor, on Monday said that both sides are actively engaged in firming up a trade deal, forex analysts said.

According to Dilip Parmar, Research Analyst, HDFC Securities, the USD-INR pair has immediate support at 89.90 and resistance at 90.40. “Short-term traders should watch the 89.90 level closely, as a move below it could trigger a short-term trend reversal,” he said.

Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, was trading 0.09 per cent higher at 98.95.

Brent crude, the global oil benchmark, was trading 1.38 per cent higher at USD 64.75 per barrel in futures trade.

On the domestic equity market front, the 30-share benchmark index Sensex lost 250.48 points or 0.30 per cent to settle at 83,627.69, while the Nifty fell 57.95 points or 0.22 per cent to 25,732.30.

Foreign institutional investors offloaded equities worth Rs 1,499.81 crore on Tuesday, according to exchange data.

According to government data released on Monday, India’s retail inflation rose to a three-month high of 1.33 per cent in December, mainly due to higher food prices, but remained below the Reserve Bank of India’s lower tolerance level.

Also, the latest data from the Income Tax Department showed the government’s net direct tax collection grew about 8.82 per cent to over Rs 18.38 lakh crore in the current fiscal till January 11 due to slower refunds and better corporate tax mop-up.

Net corporate tax collection grew 12.4 per cent to over Rs 8.63 lakh crore, and taxes from non-corporates, including individuals, rose 6.39 per cent to about Rs 9.30 lakh crore. PTI HVA DRR DRR