Rupee settles flat at 84.07 against the US dollar amid market fluctuations

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The Indian rupee settled flat at 84.07 (provisional) against the US dollar on Tuesday. This stability was influenced by a combination of positive domestic market sentiments and declining crude oil prices, but was offset by ongoing foreign fund outflows.

Forex traders noted that the rupee is hovering around historically low levels, primarily due to the strength of the dollar. While the local currency received some support from the buoyant domestic equity markets and a dip in crude oil prices, it was still under pressure from persistent selling by foreign investors. There were also indications of intervention by the Reserve Bank of India (RBI), which helped the rupee maintain its value at lower levels.

On Tuesday, the rupee opened slightly lower at 84.08 against the dollar in the interbank foreign exchange market. It traded within a narrow range throughout the day before closing at 84.07 (provisional), marking no change from its previous close. On Monday, the rupee had settled 1 paisa higher at 84.07 against the greenback.

Earlier this month, on October 11, the local currency hit its lowest closing level of 84.10 against the dollar, which has raised concerns among traders about its future trajectory. The dollar index, which measures the US dollar's strength against a basket of six currencies, was trading 0.04 per cent lower at 104.27 on Tuesday.

Traders pointed out that the rupee is under considerable pressure largely due to continuous outflows from foreign funds. Nevertheless, the decline in crude oil prices has provided some relief to the currency, despite the numerous challenges it faces in the market.

In futures trade, Brent crude, the global oil benchmark, rose by 0.74 per cent to USD 71.95 per barrel. This increase could have potential implications for the rupee, as higher oil prices generally increase the import bill for India, putting further pressure on the currency.

On the domestic equity front, the Sensex experienced a notable rise, advancing by 363.99 points, or 0.45 per cent, to close at 80,369.03 points. Similarly, the Nifty also saw gains, rising by 127.70 points, or 0.52 per cent, to settle at 24,466.85 points.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Monday, offloading shares worth Rs 3,228.08 crore, according to data from the exchanges. This selling activity continues to affect the rupee and raises concerns about the overall health of the market as investors assess the implications of fluctuating global conditions and domestic economic performance.

The rupee's stability amid these conditions reflects the delicate balance of various market forces and highlights the ongoing challenges that the Indian currency faces, as reported by PTI.

(With inputs from PTI)