Mumbai: The rupee declined by 4 paise to settle at 82.90 against the US currency on Monday as strong American currency and worries over rising global crude oil prices weighed on the local unit.
Forex traders said gains in domestic stock markets restricted the downfall of the domestic currency.
The local unit opened firm at 82.84 to a dollar at the interbank foreign exchange market and inched up to the day’s high of 82.83 in early deals.
However, the rupee gave up early gains as the US dollar and bond yields remained at higher levels ahead of the Federal Reserve’s meeting this week.
The rupee dropped to a low of 82.91 before settling at 82.90, down by 4 paise over the previous close. On Friday, the rupee had settled at 82.86.
Anuj Choudhary Research Analyst, Sharekhan by BNP Paribas, said the rupee depreciated on a strong US Dollar and surge in crude oil prices.
“The US Dollar strengthened on rising market expectations of a pushback in rate cut by the US Federal Reserve. We expect the rupee to trade with a slight negative bias on the strong Dollar and some selling pressure from foreign investors.”
Worries over rising global crude oil prices may also weigh on the rupee, he added.
The US dollar index, which measures the greenback’s strength against a basket of six currencies, was trading higher by 0.08 per cent at 103.51.
Brent Crude, the global oil benchmark, gained 0.66 per cent to trade at USD 85.90 a barrel in global markets.
“As we approach the important Federal Reserve policy meeting, USD/INR is expected to remain fairly stable, with prices likely to fluctuate between 82.65 and 83.15,” Jateen Trivedi, VP Research Analyst at LKP Securities, said.
Meanwhile, domestic stock markets closed higher in a volatile market. Benchmark BSE Sensex climbed 104.99 points to settle at 72,748.42, while broader Nifty rose by 32.35 points to 22,055.70.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,051.09 crore on Monday, according to exchange data.
Meanwhile, India’s forex kitty jumped by USD 10.47 billion to USD 636.095 billion for the week ended March 8, the Reserve Bank said on Friday.
In the previous reporting week, the overall reserves had risen by USD 6.55 billion to USD 625.626 billion.
