Indian Rupee Falls to 88.66 Against US Dollar Amid Market Pressures

Mumbai: The Indian rupee has dropped by 3 paise to 88.66 against the US dollar in early trading on Friday, reflecting a general strengthening of the American currency against other major currencies. This decline comes as foreign investors continue to withdraw funds from the Indian capital markets, adding to the pressures on the domestic currency.

Forex traders report that the rupee's weakness is exacerbated by significant selling activity in domestic equity markets and rising crude oil prices in international markets.

In the interbank foreign exchange market, the rupee opened at 88.61 and further declined to 88.66 against the dollar during early trades, marking a loss of 3 paise compared to its previous closing level. Previously, the domestic currency had ended with a gain of 7 paise, also at 88.66 against the dollar on Thursday.

The dollar index, which measures the currency's strength against a basket of six other currencies, increased by 0.08 per cent to 99.66.

Brent crude oil, the global benchmark, also saw a rise of 0.39 per cent, trading at USD 63.62 per barrel in futures markets.

Anand James, Chief Market Strategist at Geojit Investments Limited, remarked, "Crude oil prices fell on Thursday amid investor concerns over a possible oversupply and signs of softening demand in the United States, the leading global consumer of oil."

On the domestic equity front, indices are experiencing significant downturns. The Sensex fell by 610.92 points, or 0.73 per cent, to 82,700.09, while the Nifty index decreased by 169.50 points, or 0.66 per cent, to 25,340.20 early in the trading session.

According to data from the exchanges, foreign institutional investors sold equities worth Rs 3,263.21 crore on Thursday, further impacting market sentiment.

Additionally, a recent monthly survey highlighted that India’s services sector growth slowed to its most sluggish pace in five months during October. Competitive pressures and heavy rainfall in various regions contributed to a slower increase in output.

The seasonally adjusted HSBC India Services PMI Business Activity Index fell from 60.9 in September to 58.9 in October, indicating a deceleration in expansion that had not been observed since May.