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Amid uncertainty over the India-US trade agreement, the rupee on Wednesday fell by 52 paise to close at 87.43 (provisional) per dollar. Forex traders said month-end dollar demand from importers and continued foreign capital outflows also put pressure on the local currency.
The rupee opened at 87.10 against the dollar in the interbank foreign exchange market. During trading, it reached a low of 87.05 against the dollar. Finally it closed at 87.43 (provisional) per dollar, which is a decline of 52 paise from the previous close price.
The rupee on Tuesday fell to its lowest level in more than four months. It fell by 21 paise to close at 86.91 against the US dollar. In the domestic stock markets, the BSE Sensex closed at 81,481.86 points with a gain of 143.91 points, while the Nifty closed at 24,855.05 points, up 33.95 points.
According to stock market data, foreign institutional investors (FIIs) were sellers on Tuesday and sold shares worth a net Rs 4,636.60 crore.
“The Indian rupee depreciated sharply due to uncertainty over the India-US trade deal after US President Donald Trump hinted at imposing 20-25 per cent tariff rates before the August 1 deadline,” said Anuj Chowdhary, research analyst at Mirae Asset Sharekhan.
Chowdhary said, “Amid uncertainty over the trade deal between India and the US, we expect the rupee to fall further. Rising crude oil prices globally and foreign capital outflows have also put pressure on the rupee.”
Meanwhile, US President Donald Trump has said that the trade agreement with India has not been finalised yet. “I think so too,” he said in response to a question on reports that India was preparing to face higher US tariffs of between 20-25 per cent.
Earlier, an official had said in New Delhi on Tuesday that a US team will visit India on August 25 for the next round of talks on the proposed bilateral trade agreement between the two countries.
The team is arriving at the end of next month but both sides are engaged in resolving differences to reach an interim trade deal before August 1. Trump had suspended tariffs imposed on several countries, including India (26 per cent), till August 1. The Indian and US teams completed the fifth round of talks for the agreement in Washington last week.
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