Indian Rupee notes are seen in this picture illustration taken in Mumbai June 12, 2013. File. (For Representational purpose only)
| Photo Credit: Reuters
The rupee depreciated by 8 paise to 82.74 against the US dollar in early trade on Friday, tracking a firm dollar against major rivals overseas.
Analysts said, weak sentiment in the domestic equity market and elevated level of crude prices nearing USD 87 per barrel also weighed on the domestic unit.
On Thursday, the Reserve Bank of India in its bi-monthly monetary policy review decided to keep key interest rate unchanged, but hinted at tighter policy if food prices drive inflation higher.
The American currency regained after US consumer price inflation showed moderation in July, raising hopes that the US Federal Reserve would pause rate hike.
At the interbank foreign exchange market, the local unit opened at 82.75 against the US dollar and moved in a narrow range of 82.73 to 82.76. It later traded at 82.74 against the greenback, registering a fall of 8 paise from its previous close.
On Thursday, the rupee rebounded 19 paise to close at 82.66 against the US dollar after the RBI asked banks to set aside a larger part of incremental deposits under the cash reserve ratio (CRR) as part of measures to take out excess liquidity from the banking system.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.05% to 102.57.
Global oil benchmark Brent crude was trading 0.02% lower at USD 86.38 per barrel.
In the domestic equity market, the 30-share BSE Sensex was trading 229.33 points or 0.35 per cent lower at 65,458.85. The broader NSE Nifty declined 76.05 points or 0.39% to 19,467.05.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Thursday as they purchased shares worth Rs 331.22 crore, according to exchange data.
