Rupee slips 2 paise to 84.49 against US dollar in early trade

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The Indian rupee slipped 2 paise to trade at 84.49 against the US dollar in early trade on Friday, as significant foreign fund outflows and strong month-end dollar demand from importers weighed on the currency. According to forex traders, the rupee remains under pressure due to persistent dollar demand from importers and foreign banks.

At the interbank foreign exchange market, the rupee opened at 84.49, recording a marginal decline of 2 paise compared to its previous close of 84.47. On Thursday, the rupee had already weakened by 7 paise to end at 84.47 against the greenback.

Foreign Portfolio Investors (FPIs) offloaded shares worth ₹11,756.25 crore in the capital markets on Thursday, as per data from stock exchanges. The selling spree by FPIs exerted further pressure on the rupee, which briefly hit its highest level of the day at 84.51 before settling at 84.4850. Analysts noted that the Reserve Bank of India (RBI) appears to have intervened to prevent the currency from breaching the 84.50 level.

"Month-end demand for the US dollar from importers and foreign institutional investors kept the currency under pressure near 84.50," said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP. "We expect the buying momentum to persist on Friday as well," he added.

Meanwhile, the dollar index, which measures the greenback's performance against a basket of six major currencies, was down 0.18 per cent at 105.85 in morning trade. Despite the index's decline, the rupee struggled due to strong local factors, including the impact of FPI sell-offs.

In global markets, Brent crude, the international oil benchmark, gained 0.14 per cent to trade at USD 73.38 per barrel in futures trade, indicating stabilising oil prices. Rising oil prices typically exert pressure on the rupee, as India is a major importer of crude oil.

On the domestic equity front, markets opened on a positive note. The 30-share BSE Sensex rose 396.99 points or 0.50 per cent to trade at 79,440.73 in the morning session, while the broader Nifty index climbed 128.00 points or 0.54 per cent to reach 24,042.15.

Despite strong domestic equity performance, the rupee's trajectory remains under scrutiny amid continued foreign fund outflows and global uncertainties. As per PTI, analysts expect that the Reserve Bank of India's intervention could continue to stabilise the rupee within a narrow range. PTI reports that the rupee's performance will also depend on the direction of global risk sentiment and oil price movements in the days ahead.

(With inputs from PTI)