The rupee saw a steep plunge of 30 paise to 87.25 against the US dollar in early trade on Monday as the American currency started recovering from six-month low level while trade-related uncertainties weighed on investor sentiment.
A subdued domestic equity market and uninterrupted outflow of foreign funds also put pressure on the local unit, though it found some support due to easing crude oil prices, forex traders said.
At the interbank foreign exchange, the rupee opened weak at 87.24 amid intense volatility and touched the low of 87.34 before trading at 87.25 against the greenback in early deals, down 30 paise from its previous closing level.
On Friday, the rupee appreciated 17 paise to close at 86.95 against the US dollar.
The rupee had settled 6 paise lower at 87.12 against the US dollar on Thursday, snapping its three-session rally.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.03 per cent at 103.84.
Brent crude, the global oil benchmark, fell 0.58 per cent to $69.95 per barrel in futures trade.
In the domestic equity market, the 30-share BSE Sensex was trading 133.39 points, or 0.18 per cent, higher at 74,465.97 points, while the Nifty was up 34.05 points, or 0.15 per cent, at 22,586.55 points. Both the indices settled almost flat on Friday after ending sharply higher in the preceding two sessions.
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 $1.781 billion to $638.698 billion in the week ended February 28.
The overall forex kitty had jumped by $4.758 billion to $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 per cent.
Economists say the outlook remains cloudy with President Donald Trump threatening a trade war and purging the federal workforce.