The rupee opened on a weak note and fell 12 paise to 70.93 against the US dollar in early trade on Wednesday, ahead of the outcome of the Reserve Bank of India’s monetary policy review meet.
Forex traders said, besides the RBI’s monetary policy review outcome, unabated foreign fund outflows and cautious opening in domestic equity market also weighed on the local unit.
At the Interbank Foreign Exchange market, the rupee opened weak at 70.92, then fell to 70.93 against the US dollar, showing a decline of 12 paise over its previous closing. The rupee had closed at 70.81 against the US dollar on Tuesday.
Traders said weakening of the greenback vis-a-vis other currencies overseas and easing of crude oil prices added support to the local unit.
Meanwhile, Brent crude futures, the global oil benchmark, fell 0.10 per cent to $58.88 per barrel, as the US-China trade dispute rattled investor sentiments.
Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 2,107.93 crore on Tuesday, according to provisional data.
The domestic bourses opened on a cautious note, with benchmark indices Sensex trading 69.12 points down at 36,907.73 and Nifty lower by 27.10 points at 10,921.15.
Meanwhile, on the global front, investors fretted as a dispute between two of the world’s largest economies intensified over tariffs and currency.
China is, meanwhile, reported to have said that it is halting new purchases of US agricultural products after US President Trump vowed last week to impose new tariffs on Chinese goods starting in September.