Daijiworld Media Network – Mumbai

Mumbai, Oct 26: The Indian rupee fell 5 paise to 94.98 against the US dollar in early trade on Monday, weighed down by elevated crude oil prices and escalating geopolitical tensions in the Middle East.

At the interbank foreign exchange market, the rupee opened at 94.92 before weakening to 94.98, compared with its previous closing level of 94.93. On Friday, the domestic currency had depreciated by 12 paise, marking its second consecutive session of losses.

Forex traders said risk aversion in global markets amid rising tensions in the Middle East put pressure on the rupee. However, weakness in the US dollar and US Treasury yields helped limit its decline.

Anuj Choudhary, research analyst at Mirae Asset Sharekhan, said the rupee was likely to trade with a slight negative bias due to geopolitical uncertainty, high crude oil prices and selling pressure from foreign institutional investors (FIIs). He added that a weaker US dollar and possible intervention by the Reserve Bank of India (RBI) could provide support to the currency at lower levels.

Meanwhile, the dollar index, which measures the US currency against a basket of six major currencies, was trading 0.15 per cent lower at 101.49.

Brent crude, the global oil benchmark, rose 1.92 per cent to USD 114.48 per barrel in futures trade, adding to concerns over India's import bill.

Domestic equity markets also opened lower on Monday. The BSE Sensex fell 536.30 points to 72,583.86, while the NSE Nifty declined 200.10 points to 22,402.80.

According to exchange data, foreign institutional investors purchased equities worth Rs 887.65 crore on a net basis on Friday.

Separately, Reserve Bank of India data released on Friday showed that the country's foreign exchange reserves declined by USD 5.011 billion to USD 721.016 billion in the week ended October 16. In the previous reporting week, reserves had fallen by USD 8.578 billion to USD 726.027 billion.