Forex traders said foreign portfolio investors continue to offload Indian equities, which has been weighing on the Indian rupee in the last few months.
At the interbank foreign exchange, the local unit opened at 89.89 against the dollar, then fell to 89.90, down 15 paise from its previous close.
On Tuesday, the rupee rose 23 paise to close at 89.75 against the greenback. ” US-India trade uncertainties continue with FPIs pulling out USD 16.5 billion from equities this year, adding to importer demand and exporter caution,” said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.
“With Inflation on the lower side rupee does not have the interest rate intensive to move up, and only consistent inflows from FPIs could bring it back to an appreciative mode. For the day, importers can buy the dips while exporters can sell at the top, nearing 90.00,” Bhansali added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading marginally up by 0.04 per cent at 98.27.
Brent crude, the global oil benchmark, was trading 0.08 per cent lower at USD 61.30 per barrel in futures trade. On the domestic equity market front, the Sensex opened 188.31 points higher at 84,863.39, while the Nifty rose 80.70 points to 26,009.55.
Foreign institutional investors offloaded equities worth Rs 3,844.02 crore on Tuesday, according to exchange data.
