Mumbai:
The rupee closed almost flat at 74.84 against the US currency on Tuesday despite stellar gains in equity markets and stable oil prices.
Analysts said month-end dollar demand from gold importers and forex outflows restricted gains in the local unit.
Investors are also awaiting the outcome of the two-day policy meeting of the Federal Reserve that will conclude on Wednesday, they said.
At the interbank forex market, the rupee witnessed high volatility and touched an intra-day high of 74.71 and a low of 74.90 against the US dollar. The rupee finally closed at 74.84 against the US dollar, down by just 1 paisa over its last close of 74.83.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose by 0.25 per cent to 93.90.
“Rupee is not responding to the dollar weakness since last couple of days amid month-end dollar demand from gold importers ahead of festive season,” HDFC Securities Deputy Head Retail Research Devarsh Vakil said adding that so far this month, dollar index has declined 3.5 per cent while the rupee has appreciated only 0.9 per cent.
Vakil further noted that the domestic currency traded in a narrow range as the central bank’s dollar buying restricted the gains in the rupee.
Further, market participants will wait for the Fed statement as there will not be any change in rate but the stance could remain on dovish side which could again put pressure on dollar, he said.
Meanwhile, market benchmark index Sensex surged over 558 points and the NSE Nifty topped the 11,300-mark on Tuesday, propelled by broad-based buying and firm cues from global markets.
Foreign institutional investors were net sellers in the capital market, as they sold equity shares worth Rs 453.31 crore on Monday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, rose 0.23 per cent to USD 43.51 per barrel.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 74.7620 and for rupee/euro at 87.5289. The reference rate for rupee/British pound was fixed at 95.8937 and for rupee/100 Japanese yen at 70.79.
