Mumbai, February 27 The rupee fell by 4 paise to 90.95 against the US dollar in the early trade on Friday, weighed down by outflows from foreign institutional investors and a decline in the domestic equity markets in the morning session.
However, a weaker US dollar and a drop in global crude oil prices prevented a sharper decline in the local unit, forex traders said.
At the interbank foreign exchange market, the rupee opened at 90.91 against the US dollar before slipping to 90.95, down 4 paise from its previous close.
The rupee closed at 90.91 against the US dollar on Thursday.
"Despite the FPIs selling dollars, there was good dollar buying yesterday (Thursday), which took the rupee from 90.80 to 90.91. Unlike most Asian currencies, the rupee has not been able to capitalize on the fall in the dollar index, while gains have led to a decline in the rupee," said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.
Meanwhile, the dollar index, which gauges the strength of the US dollar against a basket of six currencies, was trading 0.09 per cent lower at 97.70.
Brent crude, the global oil benchmark, was down 0.07 per cent to USD 70.70 per barrel in futures trade.
"Brent crude remained below USD 71 levels as talks between the US and Iran progressed with some concessions from both sides, although no concrete decision was reached," Bhansali said.
On the domestic equity market front, the Sensex dropped by 364.62 points to 81,883.99 in the early trade, while Nifty declined by 117.15 points to 25,379.40.
Foreign institutional investors offloaded equities worth Rs 3,465.99 crore on Thursday, according to exchange data.
