The rupee appreciated by 6 paise to 72.46 against the U.S. dollar in opening trade on Monday, supported by sustained foreign fund inflows and lower crude prices.
However, muted opening in domestic equities and a strong dollar overseas weighed on the rupee, forex traders said.
At the interbank forex market, the local unit opened strong at 72.47 against the U.S. dollar and gained further ground to quote at 72.46, a rise of 6 paise over its previous close.
In the previous session, the rupee had settled at 72.52 against the American currency.
Foreign portfolio investors (FPIs) have bought close to a net $2.5 billion worth of Indian equities so far this month. FPIs bought a net $179.40 million as of March 18, 2021. For the month of March, FPIs were net buyers of a total of $2.454 billion, Reliance Securities said in a note.
“The dollar moved higher after the Turkish Lira weakened against the greenback by 15% after Turkey’s President Erdogan replaced the hawkish central bank governor with a critic of high-interest rates. Worries that events in Turkey could cause disruptions in other financial markets also supported the dollar,” it added.
Meanwhile, the Asian currencies were weak this Monday morning and will weigh on sentiments, the note said.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 124.35 points lower at 49,733.89, and the broader NSE Nifty fell 11.80 points to 14,732.20 in early deals.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.08% to 91.99.
The global oil benchmark Brent crude declined 0.39% to $64.28 per barrel.
Foreign institutional investors were net buyers in the capital market on Friday as they bought shares worth ₹1,418.43 crore, as per exchange data.
