The rupee settled near the record closing low against the greenback on Monday after trading in a narrow range throughout the day tracking its Asian peers.

The local currency settled at Rs 83.53 a dollar against 83.50 a dollar on Friday. It had hit the record closing low of 83.54 on April 16 this year.

The Indian unit traded in a range of 83.50 a dollar to 83.54 per US dollar during the day.

While the dollar was steady ahead of the US inflation data scheduled to be released on Wednesday, major Asian currencies fell by 0.1 per cent to 0.7 per cent during the trading hours. The US inflation data is expected to lend cues to the market on the trajectory of rate cuts by the US Federal Reserve.

According to some market participants, the central bank has been maintaining the rupee within a range by offsetting the pressure on it due to ongoing outflow from domestic equities, driven by caution ahead of election results.

“The RBI is in the market every day. We are not expecting any volatility until the election results. The rupee might trade in the range of 83.30 a dollar to 83.70 a dollar in the current month,” said Anindya Banerjee, VP – Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd.

Some investors have chosen to stay on the sidelines due to caution stemming from the uncertainty surrounding the general elections. Lower voter turnout has sparked concerns that the ruling party might not secure a clear majority as expected previously.

“The rupee will continue to be range-bound in the current month.  After 83.50 a dollar, the next resistance is around 83.65 a dollar,” said a dealer at a state-owned bank.

As the geopolitical situation stabilises, the optimism surrounding potential rate cuts by the US rate-setting panel in September is expected to aid the rupee in the near term, said market participants.

First Published: May 13 2024 | 6:31 PM IST

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