The rupee pared early sharp losses to settle 6 paise down at 71.38 against the US dollar on Monday, tracking recovery in domestic equities and easing crude oil prices.
The rupee remained under pressure due to concerns over 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 and fell further to touch a low of 71.66. Mirroring the recovery in equities, the local unit cut losses to touch a high of 71.32. The unit finally settled at 71.38, down by 6 paise over the 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.
Foreign institutional investors sold equities worth Rs 1,200 crore on a net basis on Monday, according to provisional exchange data.
“...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.