Indian rupee slumps against UAE dirham in early trade

Indian rupee slumps against UAE dirham in early trade

Macroeconomic data, US-China tensions weigh on investor sentiment

Published: Thu 4 Aug 2022, 9:51 AM

The Indian rupee depreciated 36 paise to 79.51 against the US dollar (21.66 versus the Emirati dirham) in opening trade on Thursday, as disappointing macroeconomic data and US-China tension weighed on investor sentiment.

At the Indian interbank foreign exchange, the rupee opened at 79.21 against the US dollar, then fell to 79.51, registering a decline of 36 paise over the last close.

On Wednesday, the rupee slumped by 62 paise to close at 79.15 against the dollar, marking its worst single-day fall in the current fiscal year.

The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.08 per cent to 106.41.

Forex traders said the rupee is underperforming among Asian currencies amid a record high trade deficit number and safe-haven demand for the dollar as traders weigh risks associated with the US-China tensions.

India's exports dipped, though marginally, for the first time in 17 months in July, while the trade deficit tripled to a record $31 billion, fuelled by over a 70 per cent rise in crude oil imports.

Traders may also remain cautious ahead of the Reserve Bank of India (RBI) monetary policy outcome on Friday.