India pushing Rupee as next global trade instrument
It is not just Western sanctions on Russia that accelerated the trend to circumvent the dollar, but the strength of the currency in the past year has also posed a challenge.
The Rupee edged higher by 5 paise to 68.71 against the US Dollar at the forex market in early trade on Tuesday on fresh selling of the American currency by exporters and banks.
The Rupee on Monday had tumbled by 30 paise to end at a fresh 2016 low of 68.76. It had hit an intraday low of 68.80 mainly due to deteriorating sentiment and worsening impact of fund outflows. The Rupee has shed 3.95 per cent of its value since the beginning of 2016.
Weakness of the Dollar against some currencies overseas and early gains in the domestic equity market supported the Rupee, dealers said.
Foreign investors have pulled out close to $5 billion from the capital markets in November so far amid concerns over the impact of demonetisation mingled with an imminent rate hike by the US Federal Reserve.
Meanwhile, the benchmark BSE Sensex was trading higher by 108.84 points, or 0.41 per cent, at 26,459.01 in early trade on Tuesday.
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