Rupee drops 38 paise to 87.33 against dollar, logs worst fall in a month

The rupee depreciated by 38 paise, its steepest fall in over a month, to close at 87.33 (provisional) against the US dollar on Monday due to volatile crude oil prices amid tariff uncertainties worldwide and unabated outflow of foreign funds.

A weaker American currency failed to support the local unit as a sell-off in the domestic equity market hit the sentiment adversely, forex traders said.

At the interbank foreign exchange, the rupee opened weak at 87.24 and touched the day's low of 87.36 amid intense volatility. The unit touched an intraday high of 87.16 before ending the session at 87.33 (provisional) against the greenback, registering a loss of 38 paise from its previous closing level.

Earlier, the domestic currency had recorded a steep single-day loss of 39 paise against the dollar on February 5.

On Friday, the rupee appreciated 17 paise to close at 86.95 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading lower by 0.15% at 103.65.

Brent crude, the global oil benchmark, rose 0.28% to USD 70.56 per barrel in futures trade.

Domestic equity markets closed lower with the 30-share BSE Sensex falling by 217.41 points, or 0.29%, to 74,115.17, and the Nifty losing 92.20 points, or 0.41%, to close at 22,460.30.

Foreign institutional investors (FIIs) offloaded equities worth ₹2,035.10 crore on a net basis on Friday, according to exchange data.

The latest RBI data released on Friday showed the country's forex reserves dropped by USD 1.781 billion to USD 638.698 billion in the week ended February 28.

The overall forex kitty had jumped by USD 4.758 billion to USD 640.479 billion in the previous reporting week.

On the global macroeconomic froth, the US Labour Department data on Friday showed increased hiring activity in February though the unemployment rate rose slightly to 4.1%.

Economists say the outlook remains cloudy with President Donald threatening a trade war and purging the federal workforce.