Mumbai, Jun 23 (PTI) The rupee declined 13 paise to close at 94.76 against the US dollar on Tuesday, weighed down by a firm greenback and weak domestic markets.
However, a decline in global crude oil prices cushioned against a sharper decline in the local unit, forex traders said.
At the interbank foreign exchange, the rupee opened at 94.73 against the US dollar and traded in a range of 94.63-94.92 before settling at 94.76, down 13 paise from its previous close.
The rupee depreciated 30 paise to close at 94.63 against the US dollar on Monday.
The rupee declined on a firm US dollar and weak domestic markets. Importers’ demand for hedging also weighed on the domestic currency. However, falling crude oil prices and softening of US treasury yields cushioned the downside. The US waiver on sanctions on Iranian oil has led to a sharp fall in oil prices,” Anuj Choudhary, Research analyst at Mirae Asset ShareKhan, said.
“We expect the rupee to trade with a negative bias on strengthening of the US dollar amid hawkish Fed and weak global markets,” he said.
V K Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said, “Rupee is likely to trade in a range of 94.60 to 94.95 in the near term. The future trend will be influenced significantly by the data regarding FCNR B deposits being mobilised by commercial banks. If this scheme succeeds in mobilising a big amount, as many people believe, the rupee can appreciate over a period, assisted by the low crude prices.” As things stand, there is no risk of significant depreciation of the rupee, Vijayakumar added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 101.09, up 0.07 per cent, amid hawkish Fed and the fragile US-Iran trade deal.
According to Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, the rupee is expected to remain range-bound between 94.20 and 95.00 levels, with upticks to the dollar getting sold off while dips are bought.
He said the main reason for the upside on the dollar index is that the markets are pricing in rate hikes towards the end of September 2026. “While several major central banks are expected to remain accommodative, the Fed is perceived to remain hawkish, attracting capital to the US.” Brent crude, the global oil benchmark, was trading lower by 0.54 per cent at USD 77.48 per barrel in futures trade.
On the domestic equity market front, Sensex tanked 893.39 points, or 1.16 per cent, to 76,200.68, while the Nifty fell 278.80 points, or 1.16 per cent, to 23,824.10.
Foreign institutional investors purchased equities worth Rs 17.86 crore on a net basis on Tuesday, according to exchange data. PTI TRB HVA
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