Rupee Falls Amidst Rising Dollar Demand and Increasing Crude Prices

The rupee declined by 5 paise to settle at 83.73 against the US dollar on Thursday, driven by heightened demand for the greenback and escalating crude oil prices.

The rupee opened stronger at 83.67 following weakness in the US dollar in overseas markets, after the US Federal Reserve hinted at a potential rate cut in the near future. Nevertheless, the Indian currency failed to sustain the gains and slumped to a daily low of 83.75 before closing at 83.73, marking a 5 paise drop from its previous close.

At the interbank foreign exchange market, the rupee had closed at 83.68 on Wednesday. Forex traders indicated that while the weak dollar initially buoyed the rupee, month-end dollar demand and rising crude prices offset those gains. According to Jateen Trivedi of LKP Securities, data in the coming weeks confirming the Fed's potential rate cut will be critical, particularly regarding higher unemployment and lower inflation. Additionally, increasing crude prices added further pressure on the rupee. Meanwhile, the BSE Sensex and Nifty reached record highs, supported by net buying from foreign institutional investors.

(With inputs from agencies.)