Rupee Breaches Rs 90 Mark Against US Dollar, Ends 22 Paise Lower

The Indian rupee slipped below the 90-mark and settled the day lower by 22 paise at 90.20 (provisional) against the US dollar on Friday, amid disappointing macroeconomic data and strengthening of the American currency in overseas markets.

Forex traders said persistent foreign fund outflows and strong dollar demand from importers further dented investor sentiment.

However, weak crude oil prices and a surge in the domestic equities cushioned the downside, they said, adding that any intervention by the RBI may support the rupee at lower levels.

At the interbank foreign exchange, the local unit opened at 89.95 against the dollar, and touched an intra-day low of 90.25 and a high of 89.92 during the session.

At the end of Friday's trading session, the rupee was quoted at 90.20 (provisional) against the greenback, down 22 paise from its previous close.

On Thursday, the rupee depreciated 10 paise to close at 89.98 against the US dollar.

"Indian rupee fell on Friday, breaching the 90-mark once again amid disappointing macroeconomic data and a positive US dollar index... FII outflows too weighed on the rupee," said Anuj Choudhary, Research Analyst, Commodities, Mirae Asset Sharekhan.

"However, weak crude oil prices and a surge in the domestic equities cushioned the downside. RBI reportedly sold dollars via state-owned banks, which also prevented the pace of fall."

On the domestic macroeconomic front, India's manufacturing sector activity witnessed the weakest improvement in two years in December, driven by softer expansions in new orders.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index (PMI) - an indicator of sector performance - fell from 56.6 in November to 55 in December. In the PMI parlance, a print above 50 means expansion, while a score below 50 denotes contraction.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.07% higher at 98.38.

Brent crude, the global oil benchmark, was trading 0.58% lower at USD 60.52 per barrel in futures trade.

On the domestic equity market front, the Sensex jumped 573.41 points to settle at 85,762.01, while the Nifty surged 182 points to 26,328.55.

Foreign institutional investors offloaded equities worth Rs 3,268.60 crore on Thursday, according to exchange data.