The Wire Staff 
New Delhi: The rupee surrendered its initial gains and slipped 2 paise to 86.55 against the US dollar in early trade on Wednesday (January 15). Despite a positive start, the rupee’s upward momentum was curtailed by elevated crude oil prices and significant foreign fund outflows.
Forex traders noted that a weaker American currency provided some support to the rupee at lower levels. The rupee opened at 86.50 and briefly touched 86.45 against the dollar before paring its gains.
On Tuesday, the rupee had rebounded from its record low, closing 17 paise higher at 86.53 against the dollar. The dollar index, which measures the greenback’s strength against a basket of currencies, was down 0.03% at 109.07.
Also read: Wholesale Inflation in December Surges to 2.37% Even as Some Food Prices Ease
In the domestic equity market, the BSE Sensex rose 271.26 points to 76,770.89, while the Nifty gained 50.80 points to 23,226.85. However, foreign institutional investors (FIIs) sold equities worth Rs 8,132.26 crore on Tuesday.
Meanwhile, government data showed that wholesale price inflation (WPI) increased to 2.37% in December 2024, driven by a surge in manufactured products. Although food prices eased, the rise in inflation may impact the Reserve Bank of India’s (RBI) decision on interest rates in its upcoming monetary policy review on February 7.
Retail inflation, which declined to a four-month low of 5.22% in December, has fueled expectations of a possible interest rate cut by the RBI. The inflation rate, based on the Consumer Price Index (CPI), has eased for the second consecutive month after breaching the RBI’s upper tolerance level of 6% in October.