Stockgram

The rupee depreciated 15 paise to 86.10 against the American currency in early trade on Friday (May 23), as foreign institutional investors continued with their sell-off due to a narrowing bond yield differential.





Forex traders said speculation of an RBI rate cut in the upcoming MPC meeting, fuelled by softening food and energy prices, is also weighing on short-term rupee sentiment, even though such a move may bolster growth in the longer-term.





At the interbank foreign exchange, the domestic unit opened at 85.95 and fell to 86.10 against the greenback, registering a loss of 15 paise over its previous close.





On Thursday, the rupee depreciated 36 paise to close at 85.95 against the US dollar.





In initial trade, the rupee also touched a high of 85.77 against the American currency.





Traders said the majority of the Asian currencies have appreciated against the dollar, this might further support the rupee.





Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.30% at 99.65.





”… The Dollar Index is showing signs of fatigue as mounting US fiscal concerns weigh on sentiment, potentially declining towards the 99.00 level, and possibly further to 98.50, which could provide relief to Asian currencies and offer near-term support to the Indian rupee,” CR Forex Advisors MD Amit Pabari said.





Brent crude, the global oil benchmark, fell 0.65% to $64.02 per barrel in futures trade.





In the domestic equity market, the 30-share BSE Sensex advanced 367.90 points, or 0.45%, to 81,319.89, while the Nifty rose 137.70 points, or 0.56%, to 24,747.40.





Foreign institutional investors (FIIs) offloaded equities worth ₹5,045.36 crore on a net basis on Thursday (May 22), according to exchange data.