Rupee falls 23 paise to close at 85.73 against US dollar

Mumbai: The rupee pared initial gains and settled for the day in the negative territory, down 23 paise at 85.73 (provisional) against the US dollar on Monday, on weak domestic equities and a bounce back in crude oil prices.

Forex traders said the rupee opened in the positive on improved global risk sentiments, however, a negative trend in domestic equities dented investor sentiments and dragged down the local unit.

At the interbank foreign exchange, the rupee opened at 85.48 against the US dollar and witnessed an intra-day high of 85.44 and low of 85.77 before settling at 85.73 (provisional), down 23 paise from its previous close.

On Friday, the rupee rose 22 paise to close at 85.50 against the greenback.

"Indian rupee declined on Monday on weak domestic equities and a bounce back in crude oil prices. Month-end dollar demand also pressured the domestic currency," said Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan.

However, a weak tone in the US dollar prevented a sharp fall in the rupee. The US dollar fell on better-than-expected inflation data from the US, Choudhary said.

"We expect the rupee to gain on weakness in the US dollar in improved global risk sentiments. However, any recovery in crude oil prices may cap sharp gains," Choudhary said, adding, "USDINR spot price is expected to trade in a range of 85.30 to 85.85".

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.26 per cent to 97.14.

Brent crude, the global oil benchmark, went down 0.28 per cent to USD 67.58 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex fell 452.44 points, or 0.54 per cent, to close at 83,606.46, while the Nifty declined 120.75 points, or 0.47 per cent, to 25,517.05.

Foreign institutional investors (FIIs) purchased equities worth Rs 1,397.02 crore on a net basis on Friday, according to exchange data.

Meanwhile, India's forex reserves dropped $1.01 billion to $697.93 billion during the week ended June 20, the Reserve Bank of India said on Friday.

In the previous week, the reserves had jumped $2.29 billion to $698.95 billion. Forex reserves had touched an all-time high of $704.885 billion in September 2024.