Mumbai, Mar 9 (PTI) The rupee pared its initial gains to settle down by 11 paise at 82.06 against the US dollar on Thursday as the support from the weak dollar was negated by a sell-off in domestic equity markets.
Besides, fresh dollar demand from banks and importers and renewed foreign fund outflows dented investor sentiments, forex traders said.
At the interbank foreign exchange market, the rupee opened at 81.93 against the greenback, and closed at 82.06, registering a fall of 11 paise over its previous close of 81.95.
During the session, the domestic unit witnessed an intra-day high of 81.77 and a low of 82.06 against the American dollar.
“The Indian rupee opened on a positive note but bargain buying from importers and the state-run banks’ dollar buying pushed the local unit near 82. The sell-off in the equities ahead of crucial US job data and the surge in short-term bond yields also weighed on the Asian currencies,” said Dilip Parmar, Research Analyst, HDFC Securities.
The rupee is expected to remain the median performer among the regional currencies on the back of foreign fund inflows and better macro environments.
“RBI’s forex intervention is also likely to keep the rupee relatively stable in the near future,” Parmar said, adding that “in the near-term, spot USD/INR is expected to consolidate between 82.50 to 81.80”.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.22 per cent lower at 105.42.
Global oil benchmark Brent crude futures declined 0.01 per cent to USD 82.65 per barrel.
The 30-share BSE Sensex ended 541.81 points or 0.90 per cent lower at 59,806.28, while the broader NSE Nifty declined 164.80 points or 0.93 per cent to 17,589.60.
Foreign Institutional Investors (FIIs) emerged as net sellers in the capital market on Thursday as they sold shares worth Rs 561.78 crore, according to exchange data.
Reserve Bank Deputy Governor M Rajeshwar Rao has said India needs to gear up to manage the exchange rate volatility as the country progresses on the path of internationalisation of the rupee and freer capital account convertibility. PTI DRR BAL BAL
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