Rupee plunges 30 paise to ₹86.56 against US dollar in early trade

The rupee lost further ground on the fourth straight session, declining sharply by 30 paise to ₹86.56 against the US dollar in early trade on Wednesday ahead of the Reserve Bank's monetary policy decisions.

Forex traders said that despite a steep fall in crude oil prices and a weak American currency, the looming worldwide trade war continued to stoke fears of global economic meltdown, fuelling withdrawal of foreign funds with the stock markets remaining shell-shocked.

At the interbank foreign exchange, the rupee opened at ₹86.52 and hit the low of ₹86.60 before strengthening a tad to ₹86.56 against the greenback in early deals, still sharply lower by 30 paise from the previous closing level.

On Tuesday, the unit crashed 50 paise to settle at ₹86.26 against the dollar. This was the steepest single-day decline for the rupee since January 13, when it lost 66 paise.

In the preceding two sessions on Monday and Friday, the rupee lost 32 paise and 14 paise, respectively. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.59% lower at 102.09.

Brent crude, the global oil benchmark, declined 3.63% to its record low level of USD 60.50 per barrel in futures trade.

On the domestic macroeconomic front, investors are awaiting the Reserve Bank of India's policy decisions. The RBI's monetary policy committee, headed by Governor Sanjay Malhotra began its three-day deliberations on key interest rates on Monday and is scheduled to announce the outcome on Wednesday.

Stock market benchmarks that rebounded from record low levels in the previous session were again trading lower with the 30-share BSE Sensex falling 433.92 points, or 0.58%, to 73,793.16, while the Nifty quoting 158.60 points, or 0.70%, down at 22,377.25 points.

On Monday, both the indices crashed over 5% before closing nearly 3% lower.

Foreign institutional investors (FIIs) offloaded equities worth ₹4,994.24 crore on a net basis on Tuesday, according to exchange data.