The Indian rupee weakened 5 paise in early trade on Monday, slipping to 89.95 against the US dollar. The decline continues the recent soft trend, largely driven by foreign portfolio investor (FPI) outflows.
At the interbank foreign exchange, the rupee opened at 89.95 per dollar, slightly lower than Friday’s close of 89.90. Traders noted that continued selling of Indian equities by foreign investors has put downward pressure on the currency, even as domestic stock markets opened modestly higher.
Analysts say foreign investor sentiment will be a key factor for the rupee in the near term. A return of foreign capital into Indian equities could help stabilize the currency, which remains weaker among emerging market currencies.
Global factors are also influencing the rupee. The dollar index was marginally lower, while rising Brent crude prices added pressure. On the domestic front, the Reserve Bank of India (RBI) continues to monitor the market and use liquidity tools to prevent sharp currency swings.
Overall, the rupee’s performance reflects cautious sentiment ahead of year-end, with thin trading volumes, continued fund outflows, and mixed global cues contributing to the early decline.