Mumbai: The rupee rose by 4 paise to 77.62 against the US dollar in early trade on Monday on support of a weak US currency in overseas markets. However, sluggish domestic equities, higher crude oil prices and persistent foreign fund outflow restrained the rupee’s growth, forex traders said.
At the interbank forex, the rupee opened slightly stronger at 77.65 against the US dollar and gained further momentum to bid at 77.62, registering a rise of 4 paise from the previous close. The rupee had closed at 77.66 against the US dollar in the previous session.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.04 per cent lower at 102.10. Global oil benchmark Brent crude futures rose 0.79 per cent to USD 120.66 per barrel.
On the domestic equity market front, the 30-share Sensex was trading 106.93 points or 0.19 per cent lower at 55,662.30, while the broader NSE nifty It fell 26.35 points, or 0.16 percent, to 16,557.95. Foreign institutional investors were net sellers in the capital markets on Friday as they sold shares worth Rs 3,770.51 crore, according to stock exchange data.
With rising inflation, Reserve Bank of India India (RBI) is likely to increase the benchmark lending rate during its monetary policy review meeting this week. The central bank is likely to raise rates by at least 35 basis points (bps) on top of the 40 bps hike that took effect last month after the off-cycle Monetary Policy Committee (MPC) meeting.