The rupee pared its initial losses and closed with slim gains in the first trading session of 2022 on Monday, tracking positive domestic equities.
Forex traders said growing concerns over the Omicron variant of coronavirus and its impact on economic recovery as well as firm crude oil prices weighed on the rupee.
At the interbank forex market, the local unit opened at 74.35 against the greenback and witnessed an intra-day high of 74.25 and a low of 74.47. The domestic unit finally settled at 74.28, registering a gain of just 1 paisa over its previous close.
The local unit had settled at 74.29 on the last trading day of 2021. "Rupee started the year on a steady note, supported by stronger regional currencies and domestic equities...," said Dilip Parmar, Research Analyst, HDFC Securities. Parmar further noted that "dollar selling has been seen from local banks on behalf of exporters and expectation of better inflows from primary markets could continue this quarter as well. Market is pricing for around Rs 44,000 crore from IPO this quarter."