Mumbai, Aug 22: The rupee fell 27 paise to close at 87.52 against the greenback on Friday as domestic equity markets ended weaker and the US dollar strengthened ahead of the speech of Fed Chairman Jerome Powell.
However, inflow of foreign funds and a drop in Brent crude prices supported the domestic unit at lower level.
At the interbank foreign exchange, the local unit opened at 87.37 against the greenback and traded in the range of 87.32-87.55 before settling at 87.52, down 27 paise from its previous close.
The rupee pared initial gains on Thursday to settle lower by 18 paise at 87.25 against the greenback.
“The rupee continued to weaken for a second day against the US dollar mainly on account of the strength of the US dollar ahead of the speech of Fed Chairman Powell and renewed concerns over steep US tariffs on Indian exports,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
“Oil importers have stepped up their dollar buying, adding to the demand from importers who were hedging for a short term after finding rupee above 87 in the last four days. Foreign banks were sellers but the overall trend has been a modest decline in the rupee’s value,” he said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, gained 0.11 per cent to 98.72.
Brent crude, the global oil benchmark, was trading 0.31 per cent down at USD 67.46 per barrel in futures trade.
On the domestic equity market front, Sensex tanked 693.86 points to settle at 81,306.85, while Nifty was down 213.65 points to 24,870.10.
Foreign Institutional Investors offloaded equities worth Rs 1,622.52 crore on Friday, according to exchange data.
According to RBI data released on Friday, India’s forex reserves rose by USD 1.488 billion to USD 695.106 billion during the week ended August 15. In the previous reporting week, the overall reserves had increased by USD 4.747 billion to USD 693.618 billion.
US Federal Reserve Chair Jerome Powell in his address to global economists at Jackson Hole on Friday hinted a reduction in interest rate in September. He, however, pointed towards rising downside risks to employment. (PTI)
