Rupee appreciates nearly 5 paise to 68.72 against US dollar in early trade

NEW DELHI: The rupee appreciated around 5 paise in early trade on Tuesday on account of some selling of American currency by banks and exporters. Meanwhile, the domestic equity market opened on a flat note with marginal gains. The NSE Nifty opened 4.65 points, or 0.06 per cent, higher at 8,131.55, while BSE Sensex opened 58.45 points, or 0.22 per cent, higher at 26,408.62.

The local currency opened nearly 4 paise higher at 68.73 against dollar. At 9.15 am, rupee was trading 5 paise up at 68.72.

The rupee on Monday settled 30 paise down at 68.77 against the dollar on account of sustained foreign fund outflows. Foreign institutional investors, or FIIs, sold shares worth Rs 461.29 crore on November 28 with gross purchases and gross sales stood at Rs 3,770.32 crore and Rs 4,231.61 crore, respectively.

According to market experts, ongoing redemption pressure on foreign currency non-resident (FCNR) deposits also aided to the rupee fall.

Foreign institutional investors have offloaded around Rs 16,225 crore from the capital market in November so far amid concerns over the impact of demonetisation coupled with fears of a rate hike by the US Federal Reserve next month

Ashwani Kumar, CMD, Dena Bank, in an interview to ETNow said, "There is further scope for rupee to weaken."

Meanwhile, the auction of government debt securities witnessed lukewarm response from foreign investors and attracted bids worth just Rs 12,287 crore against Rs 22,171 crore on offer in an online auction.