The rupee on Wednesday for the first time declined under the 79-mark against the US dollar, PTI reported. The Indian currency depreciated by 18 paise during the day’s trading session to close at 79.03.

The rupee has depreciated by 1.97% against the dollar this month and by 6.39% since January.

“The Indian Rupee has been adversely affected mainly by the FIIs [foreign institutional investors] pulling out funds from the [Indian] equity market, rising crude prices, the deteriorating trade balance and the dollar strengthening,” analysts at Emkay Wealth Management said in a note, Reuters reported.

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Foreign institutional investors sold off shares worth Rs 1,244.44 crore on Tuesday, PTI reported, citing stock exchange data.

Meanwhile, the brent crude oil cost $118.38 (Rs 9,351.96) per barrel, an increase of 0.34% from Tuesday, according to Bloomberg. Brent is a global price benchmark for crude oils from the Atlantic basin. It is used to set the price of two-thirds of the world’s trade of crude oil supply.

India imports nearly 85% of its oil. An increase in prices can push up inflation domestically, as well as widen the country’s trade and current account deficit.

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Moreover, analysts also fear dollar shortages following quantitative tightening from the US Federal Reserve, PTI reported. Central banks use quantitative tightening to decrease the money supply in the economy.

The short-term outlook for the rupee remains bullish as it could slide below 79.10 in the coming days, according to Dilip Parmar, a research analyst at HDFC Securities, PTI reported.

Meanwhile, equity markets shut with losses on Wednesday.

The 30-share BSE Sensex ended 150.48 points or 0.28% lower at 53,026.97, while the 50-share NSE Nifty fell 51.10 points or 0.32% to 15,799.10.

Hindustan Unilever Limited, Axis Bank, Bajaj Finserv, Titan Company and Wipro performed poorly on Sensex. HDFC Life, Hindustan Unilever Limited, Apollo Hospital, Axis Bank and Tata Consumer Products Limited closed on a bad note on Nifty.