Rupee Falls 13 Paise to Close at 96.88 Against US Dollar

The rupee declined 13 paise to close at 96.88 against the US dollar on Thursday, weighed down by risk aversion in global markets amid escalating geopolitical tensions.

The domestic currency opened at 96.71 against the greenback and moved in a narrow range during the session, touching an intra-day high of 96.65 and a low of 96.79. On Wednesday, the rupee had settled at 96.75 against the US dollar.

Forex traders said the rupee remained under pressure due to persistent macroeconomic concerns, including a strong US dollar and elevated crude oil prices. The dollar index, which measures the greenback's strength against six major currencies, was trading at 102.40, up 0.16 per cent.

Brent crude, the global oil benchmark, rose 4.20 per cent to USD 104.41 per barrel in futures trade amid concerns over disruptions to crude supplies through the Strait of Hormuz.

The rise in oil prices has been driven by heightened geopolitical tensions in the Middle East, with attacks on commercial shipping in the Gulf and the Strait of Hormuz raising concerns over global supply chains.

However, suspected Reserve Bank of India intervention provided some support to the rupee at weaker levels. RBI Governor Sanjay Malhotra on Wednesday said the central bank would support an orderly movement of the currency and work to prevent excessive volatility.

Mirae Asset Sharekhan Research Analyst Anuj Choudhary said the rupee was expected to trade with a negative bias amid global risk aversion, a strong dollar and higher crude prices. However, declining expectations of a US Federal Reserve rate hike in October and possible RBI intervention could provide support.

On the domestic equity market, the Sensex plunged 1,045.46 points to 71,593.24, while the Nifty fell 371.25 points to 22,231.80.

Foreign Institutional Investors sold equities worth Rs 6,121.37 crore on a net basis on Wednesday, exchange data showed.