The rupee depreciated 5 paise to 83.16 against the US dollar on Monday, as rising crude oil prices in international markets and dollar demand from importers dented investor sentiments.
However, a rally in the domestic equities supported the local unit and restricted its fall, forex traders said.
At the interbank foreign exchange market, the local unit opened at 83.14 against the US dollar. During the day, it witnessed an intraday high of 83.13 and a low of 83.16 against the American currency.
The local unit finally settled at 83.16 against the dollar, down by 5 paise from its previous close.
On Thursday, the rupee rose 1 paisa in a range-bound trade to close at 83.11 against the US dollar.
Forex market was closed on Friday on account of Republic Day.
“The Indian rupee traded in a narrow range amid higher crude oil prices as the risk sentiment improved ahead of the Federal Reserve policy decision later this week. The geopolitical uncertainty and Fed stance on rate cuts will decide the direction of forex markets,” said Dilip Parmar, Research Analyst, HDFC Securities.
Parmar added that the spot USD/INR is likely to float above 83 before the Fed decision. In the near term, the pair is expected to oscillate between 82.90 to 83.30.
“In the overseas markets, the US Dollar Index was stronger against the basket of currencies this late Monday’s session in Asia, as investors await the Fed meeting conclusion this week,” said Sriram Iyer, Senior Research Analyst at Reliance Securities.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.12 per cent to 103.55.
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