In the opening trade on Monday, the Indian rupee falls against the UAE dirham to 20.57 (75.56 against the US dollar) as the dollar demand increased amid the Russia-Ukraine geopolitical tensions, pushing investors to the safe-haven appeal of the greenback.
Forex traders said muted Indian equities and elevated crude oil prices weighed on the rupee.
At the Indian interbank foreign exchange, the rupee opened at 75.53 against the US dollar, then slipped further to 75.56, registering a decline from the last close.
On Friday, the rupee had plunged to a nearly seven-week low of 75.36 against the US currency on forex outflows and a strong dollar after a spike in inflation in the US boosted expectations of an aggressive rate hike by the Federal Reserve.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell by 0.03 percent to 96.05. Meanwhile, global oil benchmark Brent crude futures rose by 1.09 percent to $95.47 per barrel.
“The US and Britain advised their nationals to leave Ukraine as Russia has massed enough troops near Ukraine to launch a major invasion. This could push investors to the safe-haven appeal of the greenback,” said Sriram Iyer, senior research analyst at Reliance Securities.
Adding to that, the crude oil prices are rising while all the emerging Asian markets have started to become weaker. Thus, on the Indian equity market front, the 30-share Sensex is currently trading 1,117.08 points at 57,035.84 points (1.92 percent lower) while the broader NSE Nifty is currently trading 17,034.80 points (1.96 percent lower).
