Rupee on Tuesday fell by 11 paise to 82.73 against the US dollar early on Tuesday. According to forex traders, the domestic currency fall was restricted due to greenback against major rivals overseas.
The rupee had opened at 82.69 at the interbank foreign exchange, before declining by 11 paise, PTI reported. On Monday, the domestic currency had settled 11 paise higher at 82.62 against the dollar.
On Monday, rupee had opened at 82.80 and had witnessed an intra-day high of 82.57 before closing at 82.69. It was a rise of six paise over its Friday close of 82.75.
Markets began in red after the Bombay Stock Exchange (BSE) benchmark Sensex dipped 393.68 points to 61,412.51 in the early trade. The National Stock Exchange (BSE) Nifty dropped by 123.1 points to 18,297.35.
Talking about global markets, the Japanese yen surged and Asian shares fell after the Bank of Japan announced long term interest rates to rise more. After the BOJ’s decision, Japan’s Nikkei Stock Index shed 2.2 per cent after trading in positive territory, Reuters reported.
The Dow Jones Industrial Average fell 162.92 points, or 0.49%, to 32,757.54, the S&P 500 lost 34.7 points, or 0.90%, to 3,817.66 and the Nasdaq Composite dropped 159.38 points, or 1.49%, to 10,546.03. The three markets closed in the red for the fourth straight session, Reuters reported.
There are numerous factors determining the foreign exchange rate of Indian rupee and US dollar. The factors include inflation, interest rates, public debt, impact of political instability of economy among others.
Depreciation of rupee basically means decrease in the value of rupee against dollar. It will cost more rupees to buy an American dollar. The rupee vs dollar exchange rate does impact the stock markets. Rupee appreciation generally reduces inflation as the imports become cheaper.
(With inputs from Reuters, PTI)