Rupee falls 8 paise to close at 86.96 against U.S. dollar

Rupee closes at 86.96 against USD due to foreign fund outflows and rising Dollar index.

Rupee depreciated 8 paise to close at 86.96 (provisional) against U.S. dollar weighed down by sustained foreign fund outflows and an uptick in the U.S. Dollar index.

Forex traders said there is a negative bias for the USD/INR pair as foreign investors continue to sell domestic equities and the RBI support is tapering off slowly.

At the interbank foreign exchange, the rupee opened at 86.94 and touched the high of 86.91 against the greenback during intraday. It also touched the low of 86.98 before ending the session at 86.96 (provisional) against the dollar, logging a loss of 8 paise from its previous close.

On Monday, the rupee depreciated 17 paise to close at 86.88 against the U.S. dollar.

Traders said disappointing trade deficit data from the domestic markets too pressurised the rupee.

India's exports declined for the third month in a row in January, falling by 2.38% year-on-year to $36.43 billion, while the trade deficit widened to $22.99 billion in the month.

Imports rose by 10.28% year-on-year to USD 59.42 billion in January due to an increase in gold shipments, according to the Commerce Ministry data.