Mumbai, Dec 11 (PTI) The rupee appreciated 3 paise to 83.37 against the American dollar on Monday as investors stayed on the sidelines ahead of the US Federal Reserve meeting on interest rates.
Persistent foreign fund inflows supported the rupee, but a strengthening US dollar overseas capped the gains, forex traders said.
The US Federal Reserve is expected to announce its monetary policy decision later this week.
Investors will be closely watching the upcoming FOMC meeting tomorrow for clues about potential future rate cuts while expecting to keep rates the same this time, Vinod Nair, Head of Research at Geojit Financial Services, said. At the interbank foreign exchange market, the local unit opened at 83.39 against the greenback. During the session, it moved in a tight range of 83.37-83.39. The domestic currency finally settled at 83.37, a rise of 3 paise from its previous close.
The rupee continued its range-bound trade, displaying resilience at lower levels ahead of significant events like US consumer price inflation numbers and the Federal Reserve’s interest rate decision, Jateen Trivedi, VP Research Analyst at LKP Securities, said.
On Friday, the rupee fell 4 paise to close at 83.40 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.04 per cent higher at 103.67.
“…the global currency markets are expected to experience heightened volatility. Despite this, the rupee seems largely unaffected, maintaining its range between 83.20-83.50,” Trivedi said.
Brent crude futures, the global oil benchmark, advanced 0.41 per cent to USD 75.53 per barrel.
On the domestic equity market front, Sensex advanced 102.93 points, or 0.15 per cent, to settle at a new high of 69,928.53 points. The Nifty advanced 27.70 points, or 0.13 per cent, to a fresh closing peak of 20,997.10 points.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Monday as they bought shares worth Rs 1,261.13 crore, according to exchange data.
On Friday, the Reserve Bank of India (RBI) kept the benchmark repurchase rate unchanged at 6.5 per cent and retained the retail inflation projection for the current fiscal at 5.4 per cent.
As per the latest RBI data, India’s foreign exchange reserves increased to USD 604 billion as of December 1, surpassing the USD 600 billion mark after a gap of about four months. PTI HVA BAL BAL
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