Daijiworld Media Network – Mumbai
Mumbai, Aug 5: The Indian rupee on Monday (Aug 4) depreciated by 52 paise to close at 87.70 (provisional) against the US dollar, weighed down by persistent foreign fund outflows, demand from oil importers, and rising uncertainty over global trade.
Forex analysts cited renewed investor concerns after US President Donald Trump's tariff measures, which sparked fears of broader disruptions to the global trade landscape. The domestic currency also came under pressure as Oil Marketing Companies (OMCs) ramped up dollar purchases.
At the interbank foreign exchange market, the rupee opened at 87.21 and hit an intraday low of 87.70 against the greenback before closing at the same level, marking a 52 paise fall from Friday’s close of 87.18.
“The rupee may remain weak amid FII outflows and uncertainty over India - US trade negotiations. However, weakness in the US dollar due to soft economic data could lend some support at lower levels,” said Anuj Choudhary, Research Analyst, Mirae Asset Sharekhan. He added that traders would watch for US factory order data and the Reserve Bank of India's (RBI) upcoming monetary policy decision.
The central bank’s six-member Monetary Policy Committee (MPC), chaired by Governor Sanjay Malhotra, began its three-day meeting on Monday to decide the bi-monthly policy rates, with the outcome scheduled for Wednesday Aug 6.
Meanwhile, Brent crude futures declined by 1.06% to $68.93 per barrel following the OPEC+ decision to hike output in September. Global sentiment was also weighed down by concerns over a slowing US economy and tariff-related uncertainty.
The US dollar index, measuring the greenback against six major currencies, slipped 0.37% to 98.77. This decline followed weaker-than-expected US non-farm payroll data showing only 74,000 jobs added in July against forecasts of 106,000, with June's figures drastically revised to just 14,000.
Despite the rupee's slide, the Indian equity markets showed resilience. The BSE Sensex surged 418.81 points to close at 81,018.72, while the NSE Nifty gained 157.40 points to end at 24,722.75. However, foreign institutional investors (FIIs) offloaded shares worth Rs 3,366.40 cr on Friday, adding to the pressure on the rupee.