In the morning session on Monday, the Indian rupee depreciated by 4 paise against the US dollar, reaching 83.15, driven by elevated crude oil prices and increased dollar demand from importers. Forex traders noted that the rupee is trading within a narrow range, with support from positive domestic equities offset by foreign fund outflows.
At the interbank foreign exchange, the rupee opened at 83.14 against the dollar, experiencing a 4-paise decline from its previous close. The rupee's movement is expected to remain range-bound as the market awaits the US Federal Reserve's interest rate decision later in the week, according to Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.
Brent crude futures, the global oil benchmark, were trading 0.47% higher at USD 83.94 per barrel, contributing to the pressure on the rupee. The dollar index, which measures the greenback's strength against a basket of six currencies, was trading 0.09% higher at 103.52.
In the domestic equity market, the 30-share BSE Sensex was trading 566.99 points (0.80%) higher at 71,267.66 points, while the broader NSE Nifty rose 175.15 points (0.82%) to 21,527.75 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Thursday, offloading shares worth Rs 2,144.06 crore, according to exchange data. Additionally, India's forex reserves increased by USD 1.634 billion to reach USD 618.937 billion for the week ended January 12, as reported by the Reserve Bank of India (RBI) on Friday.
(With Agency Inputs)
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