Currency update: Rupee settles flat at 83.73 against US dollar in restricted trade

The rupee moved in a narrow range before settling flat at 83.73 (provisional) against US dollar on Monday as a firm American currency in overseas markets offset the gains from weak crude oil prices.

Forex traders said a recovery in the US dollar and dollar demand from importers restricted gains for the domestic unit.

At the interbank foreign exchange market, the local unit opened at 83.70 and touched a low of 83.74 against the dollar during the trading session.

It finally settled at 83.73 (provisional) against the American currency, unchanged from its previous close. On Friday, the rupee recovered from its all-time low level and appreciated 5 paise to 83.73 against the US dollar.
"We expect the rupee to trade with a slight negative bias on month-end dollar demand from importers and oil marketing companies. A recovery in the US Dollar ahead of the Federal Open Market Committee (FOMC) meeting this week may also weigh on the rupee," said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

Choudhary further noted that "a positive tone in the domestic markets and fresh foreign fund inflows may support the rupee at lower levels. Investors may remain cautious ahead of the FOMC, Bank of England (BoE) and Bank of Japan (BoJ) meeting this week.

In the domestic equity market, the 30-share BSE Sensex advanced 23.12 points, or 0.03 per cent, to settle at 81,355.84 points, and Nifty rose 1.25 points, or 0.01 per cent, to 24,836.10 points.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was at 104.48, higher by 0.16 per cent.

Brent crude futures, the global oil benchmark, rose 0.10 per cent to USD 81.21 per barrel.

Foreign institutional investors (FIIs) were net buyers in the capital markets on Friday, as they purchased shares worth Rs 2,546.38 crore, according to exchange data.

Meanwhile, surpassing the all-time high level achieved the previous week, India's forex reserves jumped by another USD 4 billion to USD 670.857 billion for the seven days ended July 19, the Reserve Bank said on Friday.

The overall reserves had jumped by USD 9.699 billion to an all-time high of USD 666.854 billion in the week ended July 12.