Rupee slumps 32 paise to close at 74.37 against US dollar

The rupee tumbled by 32 paise to end at 74.37 against the US currency on Wednesday, weighed down by a muted trend in domestic equities and strength of the American currency in the overseas market.

At the interbank foreign exchange market, the local currency opened at 74.11 and witnessed a high of 74.06 and a low of 74.42 against the US dollar in the day trade.

Also Read | Stocks stalled as oil fuels inflation nerves

The local unit finally settled at 74.37 a dollar, down 32 paise over its previous close. On Tuesday, the rupee had settled at 74.05 against the US dollar. According to Emkay Global Financial Services, "Inflationary concerns are increasing globally and as we proceed with the week, the IPO related inflows may dry out, keeping USD/INR spot afloat".

The key catalyst for the forex market is the US inflation data. A lower-than-expected CPI figure will reflect a 'transitory' factors, however, a higher-than-expected data or a figure in line with market consensus will induce the Fed to accelerate the pace of asset purchases, it said, adding that "we expect USD/INR spot to trade in between 73.75-74.50".

Meanwhile, Brent crude futures, the global oil benchmark, declined by 0.06 per cent to $84.73 per barrel.

Also Read | Oil demand to exceed 100 mn bpd in 2022: Saudi Aramco

On the domestic equity market front, the BSE Sensex ended 80.63 points or 0.13 per cent lower at 60,352.82, while the broader NSE Nifty declined 27.05 points or 0.15 per cent to 18,017.20.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.19 per cent up at 94.13.

Foreign institutional investors were net sellers in the capital market on Tuesday as they offloaded shares worth Rs 2,445.25 crore, as per exchange data.

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