Rupee Falls 8 Paise to Close at 96.43 Against US Dollar

The rupee declined 8 paise to close at 96.43 (provisional) against the US dollar on Tuesday, weighed down by sustained foreign capital outflows and uncertainty over a possible US-Iran deal.

Forex traders said a fall in global crude oil prices and a weaker dollar helped limit the rupee's decline.

At the interbank foreign exchange, the rupee opened at 96.29 and moved between 96.29 and 96.45 during the session before settling at 96.43. On Monday, the domestic currency had declined 10 paise to close at 96.35 against the dollar.

"The rupee traded on a weak note but recovered from day's lows on sharp fall in crude oil prices and softening of US dollar and US treasury yields," said Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan.

He said the rupee is expected to trade with a negative bias amid uncertainty over the US-Iran deal and elevated dollar and US Treasury yields. However, softer crude prices and reduced expectations of a Federal Reserve rate hike in October could provide support at lower levels.

The USD-INR spot price is expected to remain in the Rs 96.15-Rs 96.60 range, Choudhary said.

Meanwhile, the Reserve Bank's Monetary Policy Committee began its three-day meeting on Monday. The central bank is likely to announce a 25-basis-point rate hike on Wednesday, amid a hawkish global policy environment and heightened West Asia tensions that could add to domestic inflation risks.

The RBI's policy repo rate currently stands at 5.25 per cent. The last rate hike was in February 2023, when the central bank raised it by 25 basis points to 6.50 per cent.

The dollar index was down 0.13 per cent at 102.03, while Brent crude futures declined 1.68 per cent to USD 98.63 a barrel.

In equities, the Sensex surged 685.34 points to 73,067.81, while the Nifty gained 220.35 points to 22,776.10. FIIs sold equities worth Rs 4,699.14 crore on a net basis on Monday.