The rupee consolidated in a narrow range and settled 13 paise higher at 81.80 against U.S. dollar on Thursday, ahead of the RBI monetary policy decision scheduled to come out on Friday.
At the interbank forex market, the local unit opened at 81.60 against the greenback. It witnessed an intra-day high of 81.58 and a low of 81.94 during the session.
It finally ended at 81.80, up 13 paise from its previous close.
On Wednesday, the rupee plunged below the 82-mark for the first time in intraday trade before settling 40 paise down at 81.93 against the dollar.
"In the last hour of trade, the Indian rupee strengthened along with the Chinese Yuan which appreciated after a report of China state bank may stock up for Yuan intervention. However, the month-end rebalancing, foreign fund outflows and dollar demand from the importers limited the gains in the rupee," said Dilip Parmar, Research Analyst, HDFC Securities.
Traders remained cautious ahead of the RBI's monetary policy decision.
"In the near-term, spot USD-INR is having resistance near 82.40 and support at 81.30. A recent, parabolic up move in USD-INR in the last seven days warrants some retracement in the coming days but the directional trend remains up as long as it trades above 80.10," Mr. Parmar added.
The dollar index, which measures the greenback's strength against a basket of six currencies, rose 0.55% to 113.22.
Brent crude futures, the global oil benchmark, advanced 0.25% to $89.54 per barrel.
On the domestic equity market front, BSE Sensex ended 188.32 points or 0.33% down at 56,409.96, while the broader NSE Nifty fell 40.50 points or 0.24% to 16,818.10.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets as they offloaded shares worth ₹2,772.49 crore on Wednesday, according to exchange data.
