The rupee had opened at 82.69 at the interbank foreign exchange before depreciating by 11 paise, PTI reported. On Monday, the rupee had gained 11 paise to close at 82.62 against the dollar.
On Monday, the rupee opened at 82.80 and saw an intra-day high of 82.57 before closing at 82.69. It had closed with a gain of 6 paise over Friday’s closing level of 82.75.
The Bombay Stock Exchange (BSE) benchmark Sensex fell 393.68 points to 61,412.51 in early trade. The National Stock Exchange (BSE) Nifty closed at 18,297.35, down 123.1 points.
In global markets, the Japanese yen gained and Asian shares declined after the Bank of Japan announced a further hike in long-term interest rates. Following the BOJ’s decision, Japan’s Nikkei stock index dropped 2.2 percent after trading in positive territory, Reuters reported.
The Dow Jones Industrial Average fell 162.92 points, or 0.49%, to 32,757.54, the S&P 500 fell 34.7 points, or 0.90%, to 3,817.66 and the Nasdaq Composite fell 159.38 points, or 1.49%, to 10,546.03. Reuters reported that three markets closed in the red for the fourth straight session.
There are many factors that determine the foreign exchange rate of the Indian Rupee and the US Dollar. Factors include inflation, interest rates, public debt, impact of political instability of the economy, etc.
The devaluation of the rupee basically means a decrease in the value of the rupee against the dollar. Buying one US dollar will cost more rupees. The exchange rate of rupee vs dollar affects the stock markets. An appreciation of the rupee generally lowers inflation as imports become cheaper.
(With inputs from Reuters, PTI)