Mumbai: Rupee depreciated 36 paise to close at 85.95 against the US dollar on Thursday, on dollar demand from importers and foreign banks as well as surge in crude oil prices.
Forex traders said surging US bond yields are rattling global investors. Moreover, the narrowing yield differential between India and the US, is making Indian assets less attractive.
Besides, elevated crude oil prices amid rising geopolitical tensions in the Middle East, further dented investor sentiments.
At the interbank foreign exchange market, the rupee opened at 85.59 then touched an intra-day high of 85.58 and a low of 86.11 against the US dollar.
The domestic unit settled for the day at 85.95, lower by 36 paise over its previous close.
On Wednesday, the rupee settled at 85.59 against the greenback.
In the last three trading sessions, the rupee has declined 54 paise.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.25 per cent at 99.80.
Foreign institutional investors bought equities worth Rs 2,201.79 crore on Wednesday.