Indian rupee depreciated against the US dollar on Tuesday. This decline was attributed to continuous foreign fund outflows, stalled India-US trade negotiations, and sustained US dollar purchases. As per exchange data, foreign institutional investors offloaded equity worth Rs 1,468.32 crore on Monday. Sentiments were weak as HSBC flash composite output index dropped to 58.9 in December from 59.7 in November. However, a score above 50 indicates expansion in the sector. Traders overlooked the report that India’s merchandise exports rose 19.4 per cent year-on-year (Y-o-Y) to $38.1 billion in November, the fastest pace of growth in 41 months, driven by a sharp increase in shipments to the US, which rose 22.6 per cent, and China, which surged 90.1 per cent. On the global front, Japanese yen strengthened against other major currencies in the Asian session on Tuesday, as traders speculated that the Bank of Japan or the BoJ is likely to increase its interest rate in the policy meeting held this week.
Finally, the rupee ended at 90.93 (Provisional), depreciated by 15 paise from its previous close of 90.78 on Monday. The currency touched a high and low of 91.14 and 90.76 respectively.
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