Mumbai, Nov 2 : The rupee depreciated 21 paise to 94.97 against the US dollar in early trade on Monday pressured by the broad strength of the American currency in the overseas market.
Forex traders said a positive domestic market and softening of crude oil prices cushioned the downside.
At the interbank foreign exchange market, the rupee opened at 94.90, then fell to 94.97 against the US dollar, registering a fall of 21 paise from its previous close.
On Friday, the rupee had settled at 94.76 against the American currency.
"USDINR is likely to trade within 94.40–95.60 after ending October near 94.95. RBI measures and market operations have helped contain volatility, supported by reserves of around USD 720 billion," said Anindya Banerjee, Head of Commodity and Currency Research, Kotak NEO.
Banerjee further noted that softer crude would help the rupee; renewed oil strength would push USDINR towards the upper end.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 101.94, higher by 0.07 per cent.
Brent crude, the global oil benchmark, was trading lower by 3.07 per cent at USD 109.95 per barrel in futures trade.
The RBI data released on Friday showed India's forex reserves dropped by USD 1.269 billion to USD 719.748 billion during the week ended October 30. The overall reserves had dropped by USD 5.011 billion to USD 721.016 billion in the previous reporting week ended October 16.
Foreign Institutional Investors (FIIs) turned net buyers and purchased equities worth Rs 3,598.54 crore on a net basis on Friday, according to exchange data.
On the domestic equity market front, Sensex jumped 764.72 points to 75,216.80 in early trade, while Nifty surged 201.40 points to 23,255.90.
with inputs from PTI