Rupee settles 3 paise down at 71.35 against US dollar

The rupee pared early losses to settle 3 paise down at 71.35 against the US dollar on Monday, tracking recovery in domestic equities and easing crude oil prices. Besides, the domestic unit weakened amid concerns of fiscal slippage and rising coronavirus outbreak fears, forex traders said.

The next trigger for the currency will be the Reserve Bank of India's monetary policy meeting, as its commentary on inflation as well as growth forecast would be keenly watched.

At the interbank foreign exchange market, the local currency opened at 71.62. During the day, it saw a high of 71.32 and a low of 71.66. The domestic unit finally settled at 71.35, up 3 paise over its previous close.

The rupee had settled at 71.32 against the American currency on Friday.

The Sensex rose by 136.78 points or 0.34 per cent to settle at 39,872.31 as 18 of its components ended with gains. The 50-share NSE Nifty gained 46.05 points or 0.39 per cent to close at 11,707.90.

The global crude benchmark Brent Futures fell 0.37 per cent down to trade at USD 56.41 per barrel.

"...This week we have RBI policy, we expect the central bank to stand pat at 5.15 per cent with accommodative stance, the commentary on inflation and growth forecast would be keenly watched.
"Meanwhile, the global concern that fast- spreading coronavirus may hamper global growth led to a gap-up open in USD/INR spot," said Rahul Gupta, Head of Research-Currency, Emkay Global Financial Services.

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The Reserve Bank of India is scheduled to hold its Monetary Policy Committee (MPC) during February 4-6, 2020.