The rupee fell 20 paise to close as 81.37 against the US dollar on Monday amid rise in crude prices and unabated foreign fund outflow.
However, strong sentiment at domestic equities market restricted the fall of the local currency, forex traders said.
At the interbank foreign exchange market, the rupee opened stronger at 80.92 to a dollar against the previous close of 81.17. The local unit moved in a range of 81.47 to 80.93 during the day.
“Dollar index helped rupee strength as dollar was weak at morning session at 101.40 but covered lost ground at 101.70,” said Jateen Trivedi, VP Research Analyst at LKP Securities.
On Friday, the rupee had appreciated by 19 paise to close at 81.17 against the US dollar.
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Meanwhile, the US dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.07 per cent to 102.08.
The Brent crude rose 1.07 per cent to USD 88.57 per barrel.
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On the domestic market front, the 30-share BSE Sensex climbed 319.90 points or 0.53 per cent to close at 60,941.67, while the broader NSE Nifty gained 90.90 points or 0.5 per cent to settle at 18,118.55.
Foreign Institutional Investors (FIIs) were net sellers in the capital market on Monday as they sold shares worth Rs 219.87 crore, according to exchange data.