Rupee began the week on a negative note, weakening 8 paise to 95.25 against the US dollar in early trade as a firmer greenback and higher global crude oil prices put pressure on the currency.The fall was limited by foreign institutional investor (FII) inflows and the country’s stronger foreign exchange reserves, forex traders said.On Monday, rupee began the session at 95.18 at the interbank foreign exchange before moving down to 95.25. Last week, it had ended 5 paise higher at 95.17 against the US dollar.The dollar index, which tracks the US currency against a basket of six currencies, was up 0.17 per cent at 99.70.Brent crude, meanwhile, gained 0.91 per cent to trade at USD 84.31 per barrel in futures trade.“Overall, USD/INR remained range-bound around 95.20-95.30, with the rupee ending the session (on Friday) marginally stronger. Strong forex reserves also provided confidence and limited dollar-demand pressure,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.Bhansali said market participants would be watching currency movements closely on Monday, with exporters and importers expected to influence trading levels.“Exporters may sell upticks up to 95.40 on Monday while importers are likely to buy dips at 95. Traders will keep a close watch on developments in West Asia as well as the Reserve Bank of India (RBI),” he said.Foreign institutional investors bought equities worth Rs 480.24 crore on a net basis on Friday, according to exchange data.Domestic equity markets, however, opened marginally lower on Monday. Sensex fell 19.38 points to 78,479.79 in early trade, while Nifty declined 5.10 points to 24,567.45.Rupee also found support from a substantial rise in India’s forex reserves.According to RBI data released on Friday, the country’s foreign exchange reserves increased by $10.512 billion to $692.866 billion in the week ended July 31.This followed an increase of USD 6.118 billion in the previous reporting week, when the overall reserves stood at $682.354 billion.
