Indian rupee depreciates against UAE dirham, equities weigh

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The Indian rupee depreciated 10 paise to 82.35 against the US dollar (22.43 versus the UAE dirham) in early trade on Wednesday, weighed down by the strength of the American currency market and a negative trend in the Indian equities.

At the Indian interbank foreign exchange, the rupee opened at 82.29 against the dollar, then fell to 82.35, registering a decline of 10 paise over its last close. On Tuesday, the rupee settled at 82.25 against the dollar.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.04 per cent to 102.60. Brent crude futures, the global oil benchmark, advanced 0.11 per cent to $74.99 per barrel.

"A risk-off sentiment could increase the demand for US dollar or if Houses manage to crack the deal, then on rising prospects of continuation of US growth, the US dollar will strengthen and other emerging market currencies will weaken," CR Forex Advisors’ managing director Amit Pabari said.

However, a slew of foreign direct investment flows could restrict the intensity of depreciation. Further, the Reserve Bank of India could also keep a close eye on the rates and volatility, Pabari added.

In the Indian equity market, the 30-share BSE Sensex was trading 110.89 points or 0.18 per cent lower at 61,821.58. The broader NSE Nifty declined 26.45 points or 0.14 per cent to 18,260.05.

Foreign institutional investors were net buyers in the capital markets on Tuesday as they purchased shares worth Rs14 billion, according to exchange data.

(With inputs from PTI)