The rupee depreciated 4 pounds to 79.96 against the US dollar at the opening of trading on Wednesday amid demand for dollars from oil importers and stable crude oil prices.
Forex traders said that strong dollar demand from oil importers, strong crude oil prices, as well as concerns about a ballooning trade deficit, weighed on investor sentiment.
In the interbank foreign exchange, the rupee opened at 79.91 against the US dollar, then fell to 79.96, recording a decrease of 4 piasters during the last close.
On Tuesday, the rupee recovered from an all-time low of 80.05 to close 6 pounds higher at 79.92 against the US dollar after foreign exchange inflows and suspected intervention from the Reserve Bank of India.
According to Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors, all Asian currencies are higher against the dollar. “Oil companies are still buying dollars along with panicked importers,” Bhansali said.
On the domestic stock market front, the 30-share Sensex traded 637.17 points, or 1.16 percent, at 55,404.79, while the broader NSE Nifty advanced 188.45 points, or 1.15 percent, to 16,529.00.
Meanwhile, the dollar index, which measures the dollar’s strength against a basket of six currencies, fell 0.13 percent to 106.54.
Brent crude futures fell 0.39 percent to $106.93 a barrel.
Foreign institutional investors remained net buyers in the capital market on Tuesday, buying shares worth Rs976.40 crore, according to exchange data.