The rupee depreciated 3 paise to settle at 83.23 (provisional) against the US dollar on Wednesday, as a muted trend in domestic equities and sustained foreign fund outflows weighed on investor sentiments.Forex traders said the strength of the American currency in the overseas market further dented investor sentiments.
At the interbank foreign exchange market, the local unit opened at 83.22 against the US dollar and moved in a range of 83.27 to 83.19.The rupee finally settled at 83.23 (provisional) against the US dollar, down 3 paise from its previous close.On Tuesday, the rupee had settled at 83.20 against the dollar.”The Indian rupee declined on weak domestic markets and further selling by FIIs. However, softening of US dollar cushioned the downside,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.
Market participants may remain cautious ahead of the Reserve Bank’s monetary policy decision later this week.The RBI governor-headed six-member Monetary Policy Committee (MPC) started its three-day meeting on Wednesday. Governor Skhatikanta Das will announce the decision on Friday (October 6).Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell by 0.21 per cent to 106.77.Brent crude futures, the global oil benchmark, declined 0.95 per cent to USD 90.06 per barrel.
On the domestic equity market front, the 30-share BSE Sensex closed 286.06 points or 0.44 per cent lower at 65,226.04. The broader NSE Nifty declined 92.65 points or 0.47 per cent to 19,436.10.Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Tuesday as they offloaded shares worth Rs 2,034.14 crore, according to exchange data.