MUMBAI: The rupee depreciated 48 paise to 96.16 against the US dollar in early trade on Tuesday as heightened geopolitical uncertainty put pressure on most Asian currencies, including the rupee.
Forex traders said the rupee came under pressure due to a combination of factors, crude oil prices climbed on renewed geopolitical tensions, while demand for the US dollar increased as investors moved toward safe-haven assets.
At the interbank foreign exchange market, the rupee opened at 95.95 then lost ground and touched 96.16 registering a fall of 48 paise from its previous close.
On Monday, the rupee depreciated 30 paise to close at 95.68 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 101.17, down 0.06 per cent.
Brent crude, the global oil benchmark, was trading higher by 2.02 per cent at USD 84.98 per barrel in futures trade amid concerns over disruptions to supplies through the Strait of Hormuz.
India being a major oil importer, higher crude prices remain negative for the rupee," said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.
Bhansali further said higher oil import costs have raised concerns about India’s currency account and trade balance, weighing further on the currency.
On the domestic equity market front, the BSE Sensex declined 0.42 per cent to 77,294.12 while the Nifty was down 0.64 per cent at 24,144.60.
Foreign Institutional Investors on Monday offloaded equities worth Rs 3,062.27 crore in the domestic equity market, according to exchange data.
