Rupee Trades in Narrow Range Against US Dollar - PTI

Mumbai, Feb 17 (PTI) The rupee witnessed a range-bound trade and depreciated 5 paise to 86.76 against the US dollar in initial deals on Monday, weighed down by significant foreign fund outflows and a negative trend in domestic equities.

Forex traders said the Indian rupee is trading with a negative bias as foreign banks went on a dollar-buying spree and importers scrambled to secure dollars, as they feared further depreciation amid global uncertainty.

At the interbank foreign exchange, the rupee moved in a narrow range. It opened at 86.70, then touched a high of 86.68 and a low of 86.76 in initial deals amid high volatility.

On Friday, the rupee extended its recovery and settled 21 paise higher at 86.71 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.02 per cent lower at 106.68.

"Despite the sharp fall in the dollar index, the Indian rupee remained relatively range-bound between 86.60 and 86.90. This resilience is likely due to the Reserve Bank of India's (RBI) intervention on both sides -- accumulating reserves at lower levels and selling forwards at higher levels to stabilize excessive rupee depreciation," CR Forex Advisors MD Amit Pabari said.

Brent crude, the global oil benchmark, rose 0.12 per cent to USD 74.83 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex was trading 377.50 points, or 0.50 per cent, lower at 75,561.71 points, while the Nifty was down 114.75 points, or 0.5 per cent, at 22,814.50 points.

Foreign institutional investors (FIIs) offloaded equities worth Rs 4,294.69 crore in the capital markets on a net basis on Friday, according to exchange data.

Pabari further said that ongoing FII outflows continue to exert pressure on the rupee.

"Additionally, the RBI's decision to double its government securities purchase target to USD 4.61 billion could impact liquidity conditions, influencing the rupee's trajectory. On top of that, potential tariff tensions from the Trump administration towards India remain a key risk factor," he said.

Meanwhile, India's forex reserves jumped by USD 7.654 billion to USD 638.261 billion in the week ended February 7, the RBI said on Friday.

This is the third consecutive week of a jump in the kitty, which had increased by USD 1.05 billion to USD 630.607 billion for the week ended January 31.