The rupee depreciated 24 paise to 75.85 against the U.S. dollar in opening trade on May 22 tracking weak domestic equities and strengthening American currency overseas.
Traders said the weakness in the local unit was largely due to correction in domestic equities and strengthening of the U.S. dollar. Moreover, rising coronavirus cases in the country and U.S.-China trade tensions weighed on the local unit.
The rupee opened weak at 75.72 at the interbank forex market and then fell further to 75.85, down 24 paise over its last close.
It had settled at 75.61 against the U.S. dollar on May 21.
The rupee opened weak tracking negative cues from Asian currencies which have started weaker amid mounting tensions between the U.S. and China, Reliance Securities said in a research note.
It further said that China could impose new national security legislation on Hong Kong after last year’s pro-democracy unrest, to which U.S. President Donald Trump said that Washington would react “very strongly” against it.
Meanwhile, the Reserve Bank of India on May 22 advanced its monetary policy committee meeting and cut the policy repo rate by 40 basis points.
Domestic bourses were trading with losses with benchmark indices Sensex down 86.38 points at 30,846.52 and Nifty slipping 37.55 points at 9,068.70.
Foreign institutional investors remained net sellers in the capital market, as they purchased equity shares worth ₹258.73 crore on May 21, according to provisional exchange data.
Brent crude futures, the global oil benchmark, fell 3.38% to $34.84 per barrel.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose by 0.17% to 99.14.