Rupee Faces Pressure Amid Dollar Demand Surge
The rupee weakened by 11 paise to 87.36 against the US dollar due to rising dollar demand. However, factors like positive FII inflows and declining crude oil prices helped soften losses. As markets awaited US Fed Chief Powell's speech, the rupee faced volatility influenced by importers and a major bank's dollar purchases.
- Country:
- India
The rupee dipped by 11 paise to 87.36 against the US dollar in early trading on Friday, as demand for the greenback surged. Traders highlighted that while the initial depreciation was notable, positive inflows from Foreign Institutional Investors (FII) and a fall in crude oil prices cushioned the local currency's losses.
As financial markets anticipate US Federal Reserve Chief Jerome Powell's upcoming address at the Jackson Hole Symposium, the rupee opened at 87.37 against the dollar, slightly adjusting to 87.36. On Thursday, the rupee had weakened by 18 paise to conclude the day at 87.25 against the dollar due to dollar purchases by importers and a major public sector bank.
There remains market apprehension over tariffs with the US poised to impose an additional 25% tariff on Indian exports on August 27, stirring further uncertainty. Meanwhile, the dollar index maintained a 0.10% gain, and Brent crude prices were slightly down at USD 67.55 per barrel, with markets observing volatility against the backdrop of stalled peace negotiations between Russia and Ukraine.
(With inputs from agencies.)
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- Jerome Powell
- FII inflows
- crude oil
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- Fed Reserve
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