The rupee on Monday dropped by 55 paise to close at 71.80 to the US dollar, the lowest level since December 17, ahead of the Reserve Bank of India’s policy review meet.

On Friday, the rupee had settled 17 paise lower at 71.25 against the US dollar.

This is the second straight session of loss for the domestic unit, during which it lost a total 72 paise.

Forex traders said foreign fund outflows and a stronger dollar following blockbuster US employment and factory data impacted the rupee sentiment.

Moreover, investors were cautious ahead of the next meeting of RBI’s Monetary Policy Committee scheduled during February 5-7.

At the Interbank Foreign Exchange (forex) market, the rupee opened lower at 71.57 and fell further to touch the day’s low of 71.82.

The domestic unit pared some losses before ending at 71.80 per dollar, down by 55 paise against its previous close.

“Brent crude rose for fifth straight day to gain almost 6 per cent in last one week. The resultant pressure on Indian rupee is visible as it is trading lower,” Sanctum Wealth Management Chief Investment Officer Sunil Sharma said.

Brent crude, the global oil benchmark, was trading at $62.97 per barrel, higher by 0.16 per cent.

Forex traders said concerns related to fiscal slippage weighed on the sentiment.

“The fiscal deficit for the current financial year is likely to be around 3.4 per cent of GDP, marginally higher than the targeted 3.3 per cent,” said V K Sharma, Head PCG & Capital Markets Strategy, HDFC Securities

Related Topics