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The rupee slept down by 12 paise and fell to Rs. 71.22 per US dollar22 in early trade amid strengthening American currency and rising crude prices on Tuesday.
Forex traders said strengthening US dollar against some currencies overseas and lower opening of domestic equities weighed on the local unit.
Earlier, on Monday, the rupee had settled 7 paise higher at 71.10 against the US dollar.
However, fresh foreign fund inflows capped the losses for the domestic unit. At the Interbank Foreign Exchange, the rupee opened on a weak note at 71.19 then fell further to 71.22 against the US dollar, showing a decline of 12 paise over its previous closing.
Foreign funds bought shares worth Rs 223.44 crore from the capital markets on a net basis Monday, and domestic institutional investors also bought shares worth Rs 92.32 crore, provisional data showed.
The global benchmark, Brent crude oil was trading 0.32 per cent higher at $60.12 per barrel. Meanwhile, the domestic equity market opened on a weak note.
The 30-share BSE benchmark Sensex was trading at 35,546.64, down 110.06 points in early trade.
A few days back, VK Sharma, Head PCG and capital markets strategy, HDFC securities said, "the benchmark 10-year bond yield held steady around yesterday's level of 7.30 per cent. So far this month, the rupee has declined 1.87 per cent, while overseas funds sold $554.5 million in equity and $193.10 million in debt segments."