Rupee settles 2 paise lower at 83.05 against US dollar

MUMBAI: The rupee declined 2 paise to close at 83.05 (provisional) against the US dollar on Tuesday, amid a firm American currency against major currencies overseas.

However, positive sentiment in the domestic equity markets and lower global crude prices supported the domestic unit, forex analysts said.

Investors were cautious as the Reserve Bank's monetary policy committee (MPC), the six-member rate-setting panel, began the deliberation on Tuesday. The central bank will announce the key interest rate decision on Thursday.

At the interbank foreign exchange, the rupee opened at 83.03 against the dollar and touched the intra-day low of 83.06 against the greenback. The local unit finally settled at 83.05 (provisional) against the US currency, registering a loss of 2 paise from the previous day.

The rupee settled 5 paise lower at 83.03 against the dollar on Monday.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.05 per cent higher at 104.36.

Analysts attributed the higher level of the US currency to the recent macroeconomic data, which showed steady growth in the world's largest economy.

Brent crude futures, the global oil benchmark, declined 0.24 per cent to $77.80 per barrel.

On the domestic equity market front, Sensex surged 454.67 points, or 0.63 per cent, to 72,186.09 points. The Nifty soared 157.70 points, or 0.72 per cent, to 21,929.40 points.

RBI Governor Shaktikanta Das-headed rate-setting panel on Tuesday started its three-day deliberations amid expectations of continued status quo on short-term lending rates as the retail inflation remains near the higher end of the central bank's comfort zone.

For almost a year, the Reserve Bank has kept the short-term lending rate or repo rate stable at 6.5 per cent. The benchmark interest rate was last raised in February 2023 to 6.5 per cent from 6.25 per cent to contain inflation driven mainly by global developments.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Monday as they purchased shares worth Rs 518.88 crore, according to exchange data.

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