Mumbai, Aug 6 (PTI) The rupee rose 15 paise to 87.73 against the US dollar in early trade on Wednesday amid a weakening greenback as markets awaited the outcome of the Reserve Bank’s MPC meet.
However, a rise in global Brent crude prices and FII outflows capped further gains in the local unit, forex traders said, adding that markets continued to wait for the outcome on the US tariffs.
At the interbank foreign exchange, the domestic unit opened at 87.72 against the US dollar before dipping marginally to 87.73, registering a rise of 15 paise from its previous close.
The rupee revisited its all-time low level and ended with a loss of 22 paise at 87.88 against the US dollar on Tuesday, as risk-off sentiment deepened after US President Donald Trump renewed threats to raise tariffs on Indian goods over New Delhi’s continued purchases of Russian oil.
Meanwhile, Reserve Bank of India (RBI) Governor Sanjay Malhotra-headed rate-setting panel, which started the three-day deliberations to decide the next bi-monthly monetary policy on Monday, is scheduled to announce the policy rate on Wednesday.
“The rupee which made a closing low (on Tuesday) was well protected by RBI… and we wait to watch how long RBI protects it as (US President Donald) Trump clamours to put additional tariffs on India today as no solution has emerged between the two countries,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
“If no solution emerges between the two countries in buying Russian oil, then the tariffs will come. Till then, we may expect the rupee to remain range-bound with RBI protecting 88 and FPIs continuing to buy dollars,” he said.
Meanwhile, Brent crude prices rose 0.62 per cent to USD 68.06 per barrel in futures trade.
“Russian Crude buyer sanctions continued to remain in focus. The US may hit all such buyers like India and China with tariffs as he continued his threat on Tuesday. If China and India stop their purchases of Russian oil, it will tighten global supplies, and this notion has offered oil some support,” Bhansali added.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.07 per cent to 98.71.
In the domestic equity market, the 30-share BSE Sensex rose 113.41 points to 80,823.66 in early trade, while Nifty was up 19.20 points to 24,668.75.
Foreign institutional investors (FIIs) offloaded equities worth Rs 22.48 crore on a net basis on Tuesday, according to exchange data.
