Rupee weakened slightly on Wednesday morning, falling by 3 paise to 92.43 against the US dollar in early trade at the interbank foreign exchange market.
The rupee opened at 92.42 against the dollar and slipped marginally to 92.43 during the early session. Currency traders said the fall was mainly due to a stronger US dollar in global markets and continued outflows of foreign institutional investors (FIIs).
Market participants noted that foreign investors have been selling Indian equities in recent sessions, increasing demand for the US dollar. This has put pressure on the domestic currency. At the same time, global uncertainties and geopolitical tensions have also strengthened the dollar against several emerging market currencies, including the rupee.
Despite the weakness, the rupee’s decline was limited due to some supportive factors in the domestic market. Indian equity markets opened on a positive note, which helped prevent a sharper fall in the currency.
Another factor supporting the rupee was the slight easing of global crude oil prices. Since India imports a large portion of its oil requirements, lower crude prices reduce the country’s import bill and help support the domestic currency.
In the previous trading session, the rupee had settled at 92.40 against the US dollar after touching an intraday low of 92.47. The recent movement suggests that the currency is currently trading within a narrow range.