The rupee depreciated by 11 paise to close at 82.73 (provisional) against the U.S. dollar on September 4, weighed down by a surge in crude oil prices and strength of the American currency in the overseas market.
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At the interbank foreign exchange market, the local unit opened at 82.71 against the U.S. dollar and moved in a range of 82.67 to 82.77 in the day trade.
The rupee finally settled at 82.73 (provisional) against the U.S. dollar, down 11 paise from its previous close.
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On Friday, the rupee had settled at 82.62 against the dollar.
"We expect the rupee to trade with a slight negative bias on positive US dollar and rising global crude oil prices. However, rise in risk appetite in global markets on rising expectations of a no rate hike by Fed in its September FOMC may support rupee at lower levels," said Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas.
Choudhary further said that "USDINR spot price is expected to trade in a range of Rs 82.40 to Rs 83." Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell marginally by 0.14% to 104.08.
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Brent crude futures, the global oil benchmark, advanced 0.16% to $88.69 per barrel.
On the domestic equity market front, the 30-share BSE Sensex closed 240.98 points or 0.37% higher at 65,628.14. The broader NSE Nifty advanced 93.50 points or 0.48% to 19,528.80.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Friday as they purchased shares worth ₹487.94 crore, according to exchange data.
Meanwhile, India's forex reserves dropped by $30 million to $594.858 billion in the week ended August 25, the Reserve Bank said on Friday.
In the previous week, the overall reserves had dropped by $7.273 billion to $594.888 billion.