Mumbai, Feb 28 – The Indian rupee depreciated by 19 paise to 87.37 against the US dollar in early trade on Friday, pressured by a strengthening greenback and a downturn in domestic equity markets.
Forex analysts attributed the rupee’s decline to ongoing uncertainty over U.S. tariff impositions, which have unsettled financial markets globally. The US Dollar Index, which measures the dollar’s performance against a basket of six major currencies, remained volatile, rising 0.10% to 107.35.
At the interbank foreign exchange, the rupee opened at 87.32 before sliding to 87.37, marking a significant drop from its previous close of 87.18 on Thursday, when it had recorded a marginal 1-paisa gain.
Key Market Trends Impacting the Rupee
- Geopolitical and Trade Tensions: Amit Pabari, MD at CR Forex Advisors, noted that the rupee's depreciation of 20 paise was fueled by rising geopolitical tensions and the risk of escalating trade wars.
- RBI Intervention: The Reserve Bank of India (RBI) is reportedly intervening around the 87.40 level to curb excessive rupee depreciation.
- Market Outlook: The USD/INR pair is expected to stay at elevated levels, with support at 87.00 and resistance in the range of 87.50-87.60, Pabari added.
Domestic & Global Market Indicators
- Equities Tumble:
- The BSE Sensex dropped 917.03 points (1.23%) to 73,695.40 in morning trade.
- The NSE Nifty slid 272.15 points (1.21%) to 22,272.90.
- Foreign Institutional Investors (FIIs) continued their selling streak, offloading ₹556.56 crore worth of equities on Thursday.
- Crude Oil Prices: Brent crude futures traded 0.51% lower at $73.66 per barrel, adding to concerns about global economic uncertainty.
US Tariff Turmoil Adds to Market Uncertainty
On the international front, former U.S. President Donald Trump has announced plans to impose new tariffs on Canada and Mexico starting Tuesday, while doubling the existing 10% universal tariff on Chinese imports. This move has further rattled global markets, heightening concerns about inflation and economic instability.Outlook
With heightened geopolitical risks, upcoming India GDP data, and continued foreign fund outflows, market watchers anticipate further volatility in the rupee. All eyes remain on RBI’s intervention strategy and global trade developments for future cues.
Last updated by a enewsx: