Higher crude oil price, FIIs selling to weaken rupee

Mumbai, Apr 23: The Rupee closed three to four paise up at 45.15 per USD, as compared to previous week's close of 45.18/19.

The Indian unit may not be under much pressure next week as India's foreign exchange (forex) reserves were up for the 13th week in a row by USD 987 million to a new all-time high of USD 155.196 billion for the week ended on April 14, according to the RBI's weekly statistical supplement.

However, the crude oil prices which touched an all-time high of USD 74.35 per barrel last week and traded above USD 71-72 per barrel will be putting downward pressure on the rupee, given huge import requirements from oil corporates.

Also, the foreign fund inflow in the domestic equity market came to virtual stop last week with just Rs 2.80 crore inflow in the four sessions, which will keep the Indian currency in a tight spot.

On Monday and Thursday, the foreign institutional investors (FIIs) were net buyers by Rs 477.80 crore but on Tuesday and Wednesday they were net sellers by Rs 475 crore.

The US Dollar's performance against other international currencies were quite erratic last week and Rupee is likely to track Dollar's movement against other currencies.

The Reserve Bank of India too is keeping an eye on Rupee's movement and seems to allow rupee to trade around 45.15 per US Dollar, an analyst said.

UNI