The Indian rupee opened weaker on Tuesday as it fell 8 paise to 88.67 against the US dollar in early trade. The currency came under pressure as domestic equities witnessed selling and global trade related concerns continued to affect market sentiment.
Forex analysts noted that a softer American currency, lower crude oil prices and some foreign capital inflow into Indian stocks were not strong enough to support the rupee. Investors remained cautious due to rising import bills and a widening trade deficit.
Traders were also closely watching developments around the proposed India US trade deal and the domestic PMI data expected later this week. At the interbank foreign exchange market, the rupee opened at 88.67, slipped to 88.69 and later moved slightly to 88.68 in the initial session. This marked an 8 paise loss compared to Monday’s closing level. On Monday, the rupee had settled 7 paise higher at 88.59.
The dollar index, which tracks the greenback against six major currencies, was down 0.05 percent at 99.43. Brent crude, the global benchmark, was trading 0.47 percent lower at 63.90 dollars per barrel in futures trade.
India’s import numbers added to concerns. The country’s imports rose 16.63 percent to 76.06 billion dollars due to higher shipments of gold, silver, cotton raw or waste, fertiliser and sulphur. The trade deficit widened to 31.15 billion dollars in September, the highest in more than a year.
Gold imports jumped about 200 percent to 14.72 billion dollars while silver imports surged 528.71 percent to 2.71 billion dollars in October. Crude oil imports fell to 14.8 billion dollars in October from 18.9 billion dollars in the same month last year.
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