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Rupee Dips as Foreign Capital Flees, Iran Deal Uncertainty Looms
6 Oct
Summary
- Rupee depreciated by 8 paise to close at 96.43 against the dollar.
- Sustained foreign capital outflows and US-Iran deal uncertainty impacted the rupee.
- Falling global crude oil prices and a weaker dollar capped the rupee's decline.
The Indian rupee experienced a decline of 8 paise, closing at 96.43 against the US dollar on Tuesday. This depreciation was attributed to ongoing outflows of foreign capital and uncertainties surrounding a potential US-Iran deal.
Despite these pressures, a notable decrease in global crude oil prices and a softer US dollar helped to mitigate the rupee's fall. The currency had opened at 96.29 and fluctuated between 96.29 and 96.45 before settling at its final value.
Forex traders highlighted that while the rupee traded weakly, it recovered from its lowest points due to the sharp fall in crude oil and softening US dollar and treasury yields. Analysts anticipate the rupee to maintain a negative bias due to the US-Iran deal's uncertainty and elevated yields, though lower crude oil prices and reduced odds of a Federal Reserve rate hike in October may offer some support.
