Rupee rallies 25 paise to 74.59 against US dollar amid sanctions on Russia

The rupee appreciated by 25 paise to 74.59 against the US dollar on Wednesday due to a pullback in the greenback and crude oil prices after Western countries imposed several sanctions on Russia for sending troops into separatist-held regions in Ukraine.

At the interbank forex market, the local unit opened at 74.64 against the greenback and witnessed an intra-day high of 74.54 and a low of 74.73.

The rupee was quoted at 74.59 at 1530 hrs, registering a gain of 25 paise over its previous close. On Tuesday, the rupee depreciated by 29 paise to close at 74.84 against the US currency.

Meanwhile, the dollar index, which measures the greenback's strength against a basket of six currencies, declined 0.17 per cent to 95.86.

Brent crude futures, the global oil benchmark, were trading 0.90 per cent lower at USD 95.97 per barrel.

Investors hoped that Western sanctions on Russia after Moscow's troop movements near Ukraine border might soften Vladimir Putin's defiant tone and leave some room to avoid war.

Russian President Vladimir Putin on Monday signed decrees to recognise Ukraine's regions of Donetsk and Luhansk People's Republics as independent, escalating the tension in the region and increasing fears of Moscow's invasion of Ukraine.

In retaliation, the US, the EU and Japan announced a host of sanctions on Russia.

The meeting between the US secretary of state and Russian foreign minister that was scheduled for Thursday too has been cancelled.

"SPOT USDINR pair continue to witness volatile sessions as tensions between Russia and Ukraine continue to dominate sentiments across global markets," according to Emkay Global Financial Services.

"An escalation of the current situation will trigger a rally in the USDINR pair towards 75.25 and targets of 75.72 will open up above this. Until then we expect the market to absorb the news flows in a range between 75.25--74.40," it added.

On the domestic equity market front, the BSE Sensex ended 68.62 points or 0.12 per cent lower at 57,232.06, while the broader NSE Nifty fell 28.95 points or 0.17 per cent to 17,063.25.

Foreign institutional investors were net sellers in the capital market on Tuesday, as they offloaded shares worth Rs 3,245.52 crore, as per stock exchange data.