The rupee dropped by 43 paise to 74.11 against the US dollar in early trade Wednesday, amid increased demand of the American currencies from importers and sustained foreign fund outflows, reported news agency Press Trust of India. Forex traders said, the US dollar's strength against some currencies overseas and concerns around the rift between the government and the RBI also weighed on the local unit. At the interbank foreign exchange, after opening lower at 73.91, rupee weakened further to quote at 74.11 against the dollar registering a fall of 43 paise over its previous close.
Here are 5 things to know:
1. A stable crude oil prices, however, restricted the rupee fall to some extent, forex traders said. Globally, Brent crude, the international benchmark, was trading 0.62 per cent up at $76.38 per barrel.
2. On Tuesday, the rupee declined by 23 paise against the dollar to close at 73.68. The rupee is set to finish the month with a decline of more than 1.5 per cent against the American currency. It has depreciated more than 15 per cent so far this year.
3. Last week, the Reserve Bank of India has said that it will inject Rs 40,000 crore into the system in November by buying government bonds through open market operations (OMO) for maintaining liquidity in the market.
4. Meanwhile, Japan and India signed a $75-billion bilateral currency swap agreement on Monday. The Indian government said the currency swap agreement should aid in bringing greater stability to foreign exchange and capital markets in the country.
5. On a net basis, foreign investors pulled out Rs 1,592.02 crore from equity markets Tuesday, as per provisional data. The benchmark BSE Sensex opened on a higher note up 158.99 points but soon pared the gains and was trading at 33,876.69, down 14.44 points or 0.04 per cent at 09:48 am.
(With agency inputs)
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