Rupee Rises 10 Paise to 86.71 vs US Dollar

Mumbai, Mar 18 (PTI) The rupee appreciated 10 paise to 86.71 against the US dollar in early trade on Tuesday, tracking its Asian peers and supported by positive domestic equities.

Forex traders said the sharp upside for the local unit was restricted as investors grappled with the potential economic impact of growing global trade concerns.

At the interbank foreign exchange, the rupee opened at 86.71 against the greenback, up 10 paise from its previous close.

On Monday, the rupee had appreciated 24 paise to close at 86.81 against the US dollar.

Asian currencies gained slightly as CNH rose to 7.2338, IDR was at 16395 and KRW at 1445.

Fears that US President Donald Trump's aggressive tariff policies could trigger a broader economic slowdown have undermined the greenback, said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.


Meanwhile, the US dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.19 per cent higher at 103.56.

Brent crude, the global oil benchmark, was trading 0.21 per cent higher at USD 71.22 per barrel in futures trade.

On the domestic macroeconomic front, India's trade deficit fell to a three-and-half-year low but the point of concern was exports contracting sharply, Bhansali said, adding that imports too witnessed the most significant decline in 20 months driven largely by a fall in oil imports and gold imports.

"Due to the threat from Trump's reciprocal trade tariffs exports uncertainty remains as softening global oil prices and rising economic uncertainty keep them on the downside," Bhansali said.

Additionally, US President Donald Trump's plan to impose broad reciprocal tariffs and sector-specific trade restrictions on April 2, could create further pressure on the rupee.

In the domestic equity market, the 30-share BSE Sensex was trading 577.71 points, or 0.78 per cent, higher at 74,747.66 points, while the Nifty was up 174.05 points, or 0.77 per cent, at 22,682.80 points.

Foreign institutional investors (FIIs) offloaded equities worth Rs 4,488.45 crore on a net basis on Monday, according to exchange data.