Rupee Gains 1 Paisa, Settles at 84.07 vs Dollar

Mumbai, Oct 28 (PTI) The rupee traded on a flat to positive note and settled 1 paisa higher at 84.07 (provisional) against the US dollar on Monday, on positive domestic markets and a sharp decline in crude oil prices.

Forex traders said the rupee traded in a narrow range during the day as the strong dollar weighed on the local unit, while positive domestic equities, weak crude oil prices and suspected intervention by the Reserve Bank of India (RBI) supported the local currency at lower levels.

At the interbank foreign exchange, the rupee opened at 84.08 against the greenback. It traded in a tight range and ended the day at 84.07, registering a rise of 1 paisa over its previous close.

On Friday, the rupee edged lower by 1 paisa to settle near an all-time low at 84.08 against the US dollar.

The local currency touched its lowest closing level of 84.10 against the dollar on October 11.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.02 per cent higher at 104.27.

Brent crude, the global oil benchmark, eased 6.05 per cent to USD 71.45 per barrel in futures trade.

According to traders, the rupee remains under intense pressure, mainly due to persistent foreign fund outflows.

"We expect the rupee to trade with a negative bias on overall strength in the US dollar and sustained FII outflows. Rising odds of Donald Trump winning the US presidential elections may further support the greenback," Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas, said.

Month-end dollar demand from importers may further weigh on the rupee. However, softening crude oil prices and a contained attack by Israel on Iran may support the rupee at lower levels, Choudhary added.

On the domestic equity market front, Sensex advanced 602.75 points, or 0.76 per cent, to 80,005.04 points. The Nifty rose 158.35 points, or 0.65 per cent, to 24,339.15 points.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Friday, as they offloaded shares worth Rs 3,036.75 crore, according to exchange data.

Meanwhile, India's forex reserves dropped by USD 2.163 billion to USD 688.267 billion for the week ended October 18, the Reserve Bank said on Friday.

In the previous reporting week, the overall kitty had dropped by USD 10.746 billion to USD 690.43 billion in one of the largest declines in the reserves in recent times, the RBI said.