Rupee falls 5 paise to 83.09 against US dollar

Early on Wednesday, the rupee lost 5 paise to trade at 83.09 versus the US dollar as the strength of the dollar and high crude oil prices dampened market optimism.

The rupee is reportedly trading lower due to the strong dollar and consistent foreign money outflows over the previous several days, according to forex dealers.

The domestic unit at the interbank foreign exchange started at 83.08 and hit 83.09, down 5 paise from its previous level.

The rupee fell 33 paise on Tuesday, ending the day at 83.04 versus the US dollar.

The dollar index, which measures the strength of the dollar against a basket of six other currencies, decreased slightly by 0.09 percent to 104.71.

The benchmark for world oil, Brent crude futures, increased 0.7% to USD 90.10 per barrel.

Anil Kumar Bhansali, Head of Treasury and Executive Director of Finrex Treasury Advisors LLP, stated that Saudi Arabia and Russia shocked the oil market when they extended production curbs until December, driving Brent oil to USD 90.19 per barrel.

This resulted in tighter supply over the next four months since markets only anticipated a supply reduction through October. According to Bhansali, oil is India's largest import, and any increase in the price would increase the country's current account deficit.

According to Bhansali, the rupee was sold when oil prices rose and the RBI let a rise over 83 because demand from oil corporations kept the US dollar up.

The 30-share BSE Sensex was up 76.15 points, or 0.12%, to 65,856.41 on the domestic equities market. To 19,593.25, the NSE Nifty index as a whole increased 18.35 points, or 0.09 percent.

According to exchange statistics, Foreign Institutional Investors (FIIs) sold shares worth Rs 1,725.11 crore on Tuesday, making them net sellers in the capital markets.