The rupee falls 28 paise to 71.88 against the USD in early trade
Mumbai, Sep 17 () The rupee opened with a cautious note and fell 28 paise to 71.88 against the US dollar in the first operations on Tuesday amid growing demand for the US dollar against other currencies abroad.
Forex traders said that drone attacks at Saudi oil facilities have excited demand for safe celestial assets such as the US dollar.
The dollar index, which measures the strength of the dollar against a basket of six currencies, increased 0.01 percent to 98.61.
The Indian rupee collapsed on Monday 68 percent to 71.60 against the US dollar amid concerns about rising oil prices following attacks with drones in Saudi Arabia's oil facilities.
In the Interbank Foreign Exchange, the rupee opened at 71.83 and then fell to 71.88 against the US dollar, showing a 28-percent decline over its previous close.
The Indian rupee on Monday closed at 71.60 against the US dollar.
Forex traders said that the weak opening in domestic stocks and the outflows of foreign funds incessantly also affected the national currency.
The national stock exchanges opened on a negative note on Tuesday with Sensex benchmark rates trading 137.87 points below 36,985.44 and Nifty down 38.85 points at 10,964.65.
Foreign institutional investors (FII), who were net buyers in the last sessions, unloaded shares worth Rs 751.26 million on Monday, according to interim exchange data.
The recent attack on the largest oil processing plant in Saudi Arabia has triggered oil prices. If production does not resume soon, such an increase could damage the global economy as consumption costs will also rise. This will definitely affect India, where the economy is already stressed, said Pushkar Mukewar, co-founder and co-founder of Drip Capital, a commercial financing firm based in the United States and India.
Mukewar further said that the rupee is likely to remain volatile.
The crude oil benchmark, Brent Futures, rose almost 20 percent to USD 71.95 per barrel (intraday) on Monday after twin drone attacks on Saturday destroyed more than half of Saudi Arabia's crude oil supply.
However, on Tuesday Brent Futures experienced some moderation and was trading at USD 68.35 per barrel, 0.97 percent less than the previous close.
The yield on 10-year government bonds was 6.71 percent in the morning trade.
Meanwhile, on the global front, a Chinese vice minister of finance will visit the United States on Wednesday to lay the groundwork for business talks next month. The official Xinhua news agency said Vice Minister of Finance Liao Min will lead a delegation that will visit the United States on Wednesday to pave the way for high-level talks. DRR DRR