The rupee depreciated 20 paise to close at 79.84 (provisional) against the US dollar on Friday amid a strengthening greenback overseas. At the interbank foreign exchange market, the local currency opened at 79.75 and moved in a range of 79.73 to 79.84 during the day. It finally ended at 79.84 against the American currency, down 20 paise over its previous close of 79.64.
Forex traders said the US dollar index witnessed an upturn after comments from US Federal Reserve officials over the quantum of rate hikes weighed on investor sentiments. The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.18 per cent to 107.67. Foreign fund outflows from Indian equities also dragged the local unit down.
Foreign institutional investors were net sellers in the capital market on Thursday as they offloaded shares worth Rs 1,706.00 crore, as per exchange data. “Rupee continued to consolidate in a narrow range after hawkish FOMC meeting minutes,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.
A string of US central bank officials said the Fed needs to keep raising borrowing costs to bring high inflation under control. “We expect the USD-INR (Spot) to trade sideways and quote in the range of 79.20 and 79.80,” Somaiya added, Meanwhile, Brent crude futures, the global oil benchmark, declined 1.02 per cent to USD 95.60 per barrel.
On the domestic equity market front, the BSE Sensex ended 651.85 points or 1.08 per cent lower at 59,646.15, while the broader NSE Nifty declined 198.05 points or 1.10 per cent to 17,758.45.