Rupee Closes Lower By 20 Paise At 75.01 Against Dollar

The rupee declined by 20 paise - or 0.26 per cent - to close at 75.01 against the US dollar on Monday. It moved in a range between 74.88 and 75.03 against the greenback before shutting shop near the lowest level recorded during the session, having started the session down eight paise at 74.89. Analysts say strength in the US currency overseas and a nearly 2 per cent fall in domestic equities put pressure on the rupee against the greenback. 

Domestic stock markets were set to close lower for the fourth session in a row as banking stocks tumbled on mixed expectations for an upcoming interest rate decision, while surging domestic coronavirus cases also dented sentiment.

The S&P BSE Sensex index fell as much as 1.83 per cent - or 688.88 points - to 36,918.01 in afternoon trade, and the broader NSE Nifty 50 benchmark dropped as much as 1.68 per cent - or 185.6 points - to 10,887.85.

The dollar index - which measures the greenback against six currencies - moved in a narrow range and was last seen trading 0.03 per cent lower.

Crude oil prices fell on Monday on fears about the economic fallout from rising COVID-19 cases around the globe and on oversupply worries, as the Organization of Petroleum Exporting Countries (OPEC) and its allies are set to wind back output cuts in August.

Brent crude futures - were last seen trading 0.90 per cent lower at $43.12 per barrel.

"While the dollar has weakened significantly against majors on account of record low real rates in the US, it has not weakened as much against Asian and emerging market currencies," said Abhishek Goenka, founder and CEO of IFA Global, a forex advisory firm. 

"The RBI's aggressive dollar purchases have ensured that it has weakened even less against the rupee," he said.

At the current level, the rupee has recovered 2.47 per cent against the American currency since an all-time low of 76.91 registered in April, but is still down 4.24 per cent so far this year.