Rupee to be under pressure due to huge foreign fund outflow

Mumbai, May 21: Rupee closed more than 50 paise lower at 45.55/57/USD as compared to the previous week closing of 45.04/05 largely due to heavy correction in the stock markets.

The foreign fund outflow of Rs 2,500 crore in the four trading sessions since Monday put pressure on the rupee during the week. The rupee will track the market movement in the light of heavy correction last week.

Going by the trend, rupee may face further downward pressure on Monday due to a 452-point fall in the markets on Friday and the likelihood of Foreign Institutional Investors heavy selling.

The softening of crude oil prices to USD 68-70 per barrel in the New York Mercantile Exchange (NYMEX) due to higher US inventory, will reduce some pressure on rupee.

Rupee will also find support from the rise in foreign exchange reserves by US dollar 1.342 billon to record USD 163.755 billion for the week ended on May 12, as per the weekly statistical supplement released by the Reserve Bank of India (RBI).

UNI