Rupee falls 15 paise to close at 89.86 against US dollar

Mumbai: The rupee depreciated 15 paise to close at 89.86 (provisional) against the US dollar on Friday, tracking a negative trend in domestic equities and foreign fund outflows.

Forex traders said a recovery in crude oil prices, significant dollar demand from importers, and risk-off sentiment amid trade deal uncertainties further dented investor sentiment.

At the interbank foreign exchange, the rupee opened at 89.84 against the US dollar, then touched an intra-day low of 89.94, registering a 23-paise loss from its previous close.

At the end of the trading session on Friday, the rupee pared some of its losses and was quoted at 89.86 (provisional), down 15 paise from its previous close.

On Wednesday, the rupee pared initial gains and settled for the day lower by eight paise at 89.71 against the US dollar.

Forex and equity markets were closed on Thursday for Christmas.

Forex traders said the USD/INR pair is trading under pressure due to multiple factors, including a shift toward risk aversion, driven by persistent capital withdrawals from foreign investors ahead of the holiday break, alongside heightened greenback demand from importers.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.10 per cent higher at 98.07.

Brent crude, the global oil benchmark, was trading 0.26 per cent higher at $62.41 per barrel in futures trade.

On the domestic equity market front, Sensex dropped 367.25 points to settle at 85,041.45, while the Nifty declined 99.80 points to 26,042.30.

Foreign institutional investors offloaded equities worth Rs 1,721.26 crore on Wednesday, according to exchange data.