Rupee slips 8 paise to close at 77.76 against dollar, weighed down by oil

The rupee depreciated by 8 paise to close at 77.76 (provisional) against the US dollar on Thursday, weighed down by elevated crude oil prices and persistent foreign capital outflows.

At the interbank foreign exchange market, the rupee opened lower at 77.74 against the greenback and finally settled at 77.76, down 8 paise over its previous close.

During the session, the rupee touched an all-time low of 77.81 against the American currency.

On Wednesday, the rupee had recovered from its record low to close 10 paise higher at 77.68.

"Volatility in rupee remained low even after the release of RBI policy statement," said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.

The Reserve Bank of India (RBI) on Wednesday raised the key interest rate by 50 basis points, the second increase in five weeks, to rein in the rise in prices that it saw continuing to hurt consumers in the near-term.

The rate hike comes on the back of a 40 bps increase by the RBI at an unscheduled meeting on May 4.

"Major crosses remain under pressure following broader strength in the dollar. Focus will be on the European Central Bank (ECB) policy statement and hawkish comments could restrict major weakness for the Euro," Somaiya said, adding, "We expect the USDINR to trade sideways and quote in the range of 77.40 and 78.05."

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.06 per cent lower at 102.48.

Global oil benchmark Brent crude futures declined 0.23 per cent to USD 123.29 per barrel.

On the domestic equity market front, the 30-share BSE Sensex ended 427.79 points or 0.78 per cent higher at 55,320.28, while the broader NSE Nifty surged 121.85 points or 0.74 per cent to 16,478.10.

Foreign institutional investors remained net sellers in the capital market on Wednesday as they offloaded shares worth Rs 2,484.25 crore, as per stock exchange data.