Daijiworld Media Network - Mumbai

Mumbai, Feb 16: The Indian rupee weakened by 1 paisa to 90.67 against the US dollar in early trade on Monday, pressured by foreign institutional investor (FII) outflows and a firm US dollar, forex traders said.

At the interbank foreign exchange, the rupee opened slightly stronger at 90.63 but soon eased to 90.67 against the greenback, down 1 paisa from Friday’s close. The local unit had ended the previous session 5 paise lower at 90.66.

“Ahead of the US Presidential Day holiday when cash demand is expected to be lower, the rupee opened slightly stronger from Friday’s close and should remain in a narrow range,” said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.

Traders said a marginal rise in global crude oil prices and a sharp decline in India’s foreign exchange reserves also weighed on the local unit.

Markets will keep a close eye on India’s trade balance data, which could be released by the commerce ministry on Monday, Bhansali added.

The dollar index, which measures the strength of the US dollar against a basket of six major currencies, was trading 0.02 per cent higher at 96.93.

Brent crude, the international oil benchmark, was up 0.04 per cent at USD 67.78 per barrel in futures trade.

In domestic equities, the benchmark S&P BSE Sensex declined 71.53 points to 82,555.23 in early trade, while the Nifty 50 was down 11.95 points at 25,459.15.

On Friday, FIIs sold equities worth Rs 7,395.41 crore, according to exchange data.

Data from the Reserve Bank of India showed the country’s forex reserves dropped by USD 6.711 billion to USD 717.064 billion in the week ended February 6. In the previous week, the reserves had jumped by USD 14.361 billion to an all-time high of USD 723.774 billion.