Rupee falls 17 paise against US dollar as FCNR swap deadline weighs down sentiment

Rupee began the week on a negative note, depreciating 17 paise to 95.59 against the US dollar in early trade, as investor sentiment turned cautious following the Reserve Bank of India's decision to bring forward the cut-off date for its concessional FCNR (B) deposit swap facility.The RBI had said on August 14 that the swap facility would be available only for FCNR (B) deposits mobilised until August 31, bringing forward the earlier September 30 deadline. The facility was introduced to encourage foreign currency inflows.The central bank said on Friday that the concessional swap facility had attracted $56.84 billion as of August 13.At the interbank foreign exchange market, rupee opened at 95.50 on Monday before slipping further to 95.59. The domestic currency had closed at 95.42 against the US dollar on Friday, gaining 3 paise.CR Forex Advisors MD- Amit Pabari said the inflows attracted through the facility had provided significant support to rupee, but the market could start looking beyond this temporary support."After attracting nearly $50 billion of forex inflows, the central bank has now announced that the facility will be available only for deposits mobilized until August 31, 2026. The support from these inflows remains significant, but the market will eventually begin looking beyond this temporary cushion," CR Forex Advisors MD- Amit Pabari said.Pabari said rupee could continue to find support in the near term, although the risk-reward remained tilted towards weakness."Technically, the 95.20–95.30 zone is likely to act as an important support area. As long as this level holds, USD/INR could gradually move towards the 96.20–96.50 region in the coming days," he said.Under the FCNR (B) scheme, banks offer attractive interest rates to mobilise foreign currency deposits.Meanwhile, the dollar index was at 99.54, down 0.12 per cent. Brent crude, the global oil benchmark, rose 0.47 per cent to $88.94 per barrel in futures trade.Domestic equities also opened lower, with Sensex declining 284.85 points to 77,717.05 and Nifty falling 69.25 points to 24,297.05.Foreign institutional investors remained net buyers of Indian equities on Friday, purchasing shares worth Rs 508.12 crore, according to exchange data.India's foreign exchange reserves also strengthened sharply in the latest reporting week. The reserves increased $14.136 billion to $707.002 billion in the week ended August 7, the RBI said on Friday. This followed a $10.512 billion increase to $692.866 billion in the week ended July 31.Get the latest Business News and Live updates. Download the TOI app.