Rupee trades in narrow range against dollar in early trade

Forex traders said the strong US dollar and high crude oil prices weighed on the local unit, limiting its gains.

Mumbai: The rupee witnessed range-bound trading against the US dollar in early trade on Wednesday and fell 3 paise amid a negative trend in domestic equities.

Forex traders said the strength of the American currency in the overseas market and elevated crude oil prices also weighed on the local unit and restricted the upmove.

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At the interbank foreign exchange market, the local unit opened at 83.45 and lost further ground to trade at 83.46 against the greenback in initial deals, registering a decrease of 3 paise from its previous closing level.

On Tuesday, the rupee appreciated 4 paise and settled at 83.46 against the greenback.

“The Indian rupee closed higher on Tuesday and opened flat with most Asian currencies range-bound to weaker. Rupee is expected to remain in a range of 83.35 to 83.55 with dips to be bought by importers,” said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading marginally higher by 0.05 per cent at 105.66.

Brent crude futures, the global oil benchmark, were trading 0.42 per cent higher at USD 85.37 per barrel.

In the domestic equity market, the 30-share BSE Sensex declined 81.42 points, or 0.10 per cent, to 77,972.10 points. The broader NSE Nifty fell 36.05 points, or 0.15 per cent, to 23,685.25 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Tuesday, as they purchased shares worth Rs 1,175.91 crore, according to exchange data.

Meanwhile, Reserve Bank Governor Shaktikanta Das on Tuesday asserted that the high interest rates are not impeding growth, and made it clear that the monetary policy will “unambiguously” focus on getting down inflation going forward.

The country is at the threshold of a “major structural shift” in its growth trajectory and is moving towards a path where 8 per cent real GDP growth can be sustained on a yearly basis, Das said addressing an event by Bombay Chamber of Commerce and Industry.