Rupee falls 3 paise to 84.83 against US dollar in early trade

MUMBAI: The rupee fell 3 paise to 84.83 against the US dollar in early trade on Monday, dragged down by a muted trend in domestic equities and elevated crude oil prices.

Forex traders said the rupee remains in a weakening mode due to dollar demand from importers and foreign banks.

At the interbank foreign exchange, the rupee opened at 84.83 against the greenback, registering a fall of 3 paise over its previous close.

On Friday, the rupee rebounded from its all-time low level and settled with a gain of 8 paise at 84.80 against the US dollar.

Over the past week, the Indian rupee faced depreciation following the Reserve Bank of India's announcement of leadership transition.

The RBI kept a close eye on banking system liquidity and opted for a buy-sell swap to provide much-needed support to the rupee.

Additionally, Foreign Institutional Investors (FIIs) turning net buyers in December, following significant outflows in the past two months, is expected to lend further stability to the domestic currency, CR Forex Advisors MD Amit Pabari said.

Foreign Institutional Investors (FIIs) purchased Rs 2,335.32 crore in the capital markets on net basis on Friday, according to exchange data.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading lower by 0.13 per cent at 106.86.

Brent crude, the global oil benchmark, fell 0.34 per cent to USD 74.24 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex was trading 78.29 points or 0.10 per cent down at 82,054.83 points in morning trade, while Nifty was down 15.45 points or 0.06 per cent to 24,752.85 points.

Meanwhile, India's forex reserves dropped by USD 3.235 billion to USD 654.857 billion for the week ended December 6, the RBI said on Friday.

In the previous reporting week, the reserves had increased by USD 1.51 billion to USD 658.091 billion, ending a multi-week decline in the overall kitty.