Mumbai: The rupee fell by 15 paise to 88.65 against the US dollar in early trade on Wednesday, weighed down by firm crude oil prices and continued foreign fund outflows.
Forex traders said renewed optimism over an imminent India-US trade deal helped limit the domestic currency’s losses.
At the interbank foreign exchange market, the rupee opened at 88.61 per dollar and slipped to 88.65, down 15 paise from its previous close of 88.50 on Tuesday.
Traders noted that the recent MSCI index review could attract positive foreign fund inflows. Global index provider MSCI has added Fortis Healthcare, GE Vernova T&D India, One 97 Communications (Paytm), and Siemens Energy India to its Global Standard Index.
“These inclusions are expected to drive passive inflows as global funds rebalance portfolios,” analysts said.
“As these inflows materialize, they could provide near-term support to the rupee, cushioning it against global volatility,” said Amit Pabari, MD of CR Forex Advisors.
Sentiment was also buoyed after US President Donald Trump said Washington is “pretty close” to finalizing a “fair trade deal” with India and hinted at lowering tariffs on Indian goods “at some point.” This is the second time in under two weeks that Trump has indicated progress toward a bilateral trade agreement.
Meanwhile, the dollar index—which measures the greenback against six major currencies—was up 0.06% at 99.50, while Brent crude futures slipped 0.26% to USD 65 per barrel.
In domestic markets, equities opened higher, with the Sensex surging 502.82 points to 84,374.14 and the Nifty advancing 144.05 points to 25,839.
According to exchange data, Foreign Institutional Investors (FIIs) sold equities worth Rs 803 crore on Tuesday.
