Mumbai: The rupee declined by 7 paise to close at 79.78 against the US dollar on Friday, tracking a strong dollar in overseas markets and losses in domestic equities.
At the interbank foreign exchange market, the domestic currency opened at 79.80 per dollar. It hovered in a range of 79.71 to 79.85 during the session.
The domestic unit finally settled at 79.78, down 7 paise over its previous close of 79.71.
“We expect the rupee to trade with a negative bias on the strong dollar and risk aversion in global markets. Global markets declined after IMF spokesman Gerry Rice flagged concerns over further slowdown in the global economy and said that some countries are expected to slip into recession in 2023,” said Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas.
Concerns over aggressive rate hikes by the Federal Reserve may also put downside pressure on the local unit.
However, easing crude oil prices may support the rupee at lower levels. Markets may also take cues from FII fund flows data.
“USD-INR spot price is expected to trade in a range of Rs 79 to Rs 80.50 in the next couple of sessions,” Choudhary added.
“Rupee traded weak in the later part of day as profit booking was witnessed in capital markets,” said Jateen Trivedi, VP Research Analyst at LKP Securities.
Trivedi further said, “The rupee has been in a broad weak trend since it started trading below 78.00 strong support of 80.00 being held on the back of RBI selling. Once the Reserve Bank loses its grip there will be sharp decline towards 80.50-80.75 on breach of 80.10 closing.”
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.29 percent higher at 110.05.
Brent crude futures, the global oil benchmark, advanced by 0.24 percent to USD 91.06 per barrel.
On the domestic equity market front, the BSE Sensex ended 1,093.22 points or 1.82 percent lower at 58,840.79, while the broader NSE Nifty declined 346.55 points or 1.94 percent to 17,530.85.
Foreign institutional investors were net sellers in the capital market on Friday as they offloaded shares worth Rs 3,260.05 crore, as per exchange data.
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