The Indian rupee weakened 3 paise to ₹95.97 against the US dollar in early trade on Thursday, October 1, pressured by sustained dollar demand from state-run oil companies and continued foreign portfolio outflows. The rupee opened at ₹95.95 at the interbank foreign exchange market before slipping to ₹95.97. It had settled at ₹95.94 on Wednesday.
The currency remained under pressure as firm US bond yields and overseas investor selling weighed on sentiment. However, dollar sales by state-run banks, reportedly backed by the Reserve Bank of India (RBI), helped limit the rupee's decline and kept the exchange rate below the closely watched ₹96 per dollar mark. Anil Kumar Bhansali of Finrex Treasury Advisors said the RBI supplied dollars through state-run banks in both spot and forward markets.
Meanwhile, the dollar index rose 0.09% to 101.54, hovering near a two-month high. Anindya Banerjee of Kotak Securities said the index had gained nearly 2% in September and was approaching its 52-week high of around 101.8. A stronger dollar can add pressure on emerging-market currencies, including the rupee.
Brent crude futures declined 1.18% to $96.87 a barrel. Domestic equities also opened lower, with the Sensex falling 215 points to 72,257.30 and the Nifty declining 107.25 points to 22,518.90. Foreign institutional investors sold Indian equities worth ₹10,148.41 crore on a net basis on Wednesday, adding to pressure on the domestic currency
The rupee's early movement reflects continued dollar demand and foreign outflows, while RBI intervention is helping contain losses around the ₹96-per-dollar level.
