Mumbai, February 27 The rupee declined by 17 paise to settle at 91.08 against the US dollar on Friday, weighed down by a massive outflow of foreign funds and a sharp rise in global crude oil prices amid geopolitical uncertainties.
Negative sentiment in the domestic equity markets further put pressure on the local currency, according to forex traders.
At the interbank foreign exchange market, the rupee opened at 90.91 and traded within a narrow range of 90.91-91.08 before settling at 91.08, down 17 paise from its previous close.
The rupee closed at 90.91 against the US dollar on Thursday.
"We expect the rupee to trade with a negative bias due to weak performance in the domestic equities and geopolitical risks between the US and Iran. The USD/INR spot price is expected to trade in a range of Rs 90.70 to Rs 91.20," said Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan.
Meanwhile, the dollar index, which measures the strength of the US dollar against a basket of six currencies, was trading 0.05 per cent lower at 97.74.
Brent crude, the global oil benchmark, rose by 1.64 per cent to USD 71.91 per barrel in futures trading.
On the domestic equity market front, the Sensex fell by 961.42 points to close at 81,287.19, while the Nifty was down by 317.90 points at 25,178.65.
Foreign institutional investors offloaded equities worth Rs 7,536.36 crore on Friday, according to exchange data.
On the macroeconomic front, India's economic growth estimate was raised to 7.6 per cent for the current fiscal on Friday, following a revamp of the GDP calculation framework, underscoring the resilience of the world's fastest-growing major economy amid global trade disruptions.
The country's forex reserves dropped by USD 2.119 billion to USD 723.608 billion during the week ended February 20, the RBI said on Friday. In the previous reporting week, the overall reserves had jumped by USD 8.663 billion to a new all-time high of USD 725.727 billion.
