The rupee depreciated 22 paise to 86.44 against the US dollar in early trade on Monday, weighed down by the strength of the American currency in the overseas market and a muted trend in domestic equities.
Forex traders said the Indian rupee gained on Friday but opened on a lower note on Monday as Trump Tariffs uncertainty gained.
At the interbank foreign exchange, the rupee opened at 86.35 then fell further to 86.44 against the American currency, registering a decline of 22 paise over its previous close.
On Friday, the rupee appreciated 22 paise to close at 86.22 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 107.67, higher by 0.21 per cent, after Trump threatened to apply 25 per cent Tariffs on Colombia after the plane carrying migrants was returned by the country.
Meanwhile, the US has paused sanctions and tariffs on Colombia after it agreed to accept all the terms of President Donald Trump, including accepting flights of deported migrants from America, the White House said.
The announcement comes after Trump and Colombian President Gustavo Petro threatened increased retaliatory tariffs after Petro turned away two US military aircraft full of detained Colombian migrants.
The White House late Sunday night said Colombia has agreed to all of President Trump’s terms.
“The Government of Colombia has agreed to all of President Trump’s terms, including the unrestricted acceptance of all illegal aliens from Colombia returned from the United States, including on US military aircraft, without limitation or delay,” White House Press Secretary Karolina Leavitte said.
Brent crude, the global oil benchmark, was quoted 0.57 per cent lower at USD 78.05 per barrel in futures trade.
“Brent oil slipped to USD 76.85 per barrel as Trump repeated his call for OPEC to reduce prices following the announcement of wide-ranging measures to boost US oil output in his first week of office,” said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.
Forex traders said the rupee continued to face pressure due to sustained foreign fund outflows.
Moreover, the upcoming Union Budget will play a crucial role in shaping market sentiment and the rupee’s trajectory, as expectations are high for favourable measures aimed at rekindling foreign investments.
In the domestic equity market, the 30-share BSE Sensex was trading 296.31 points or 0.39 per cent down at 75,894.15 in morning trade, while Nifty was lower by 90.50 points or 0.39 per cent to 23,001.70.
Foreign Institutional Investors (FIIs) offloaded Rs 2,758.49 crore in the capital markets on net basis on Friday, according to exchange data.
Meanwhile, India’s forex reserves dropped by USD 1.88 billion to USD 623.983 billion in the week ended January 17, the Reserve Bank of India said on Friday. Earlier, the overall kitty declined by USD 8.714 billion to USD 625.871 billion in the week ended January 10.
