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The rupee depreciated by 48 paise to close at 81.26 (provisional) against the US dollar on Monday, tracking the recovery in the American currency and a muted trend in domestic equities.
Forex traders said rising crude oil prices also weighed on investor sentiments.
At the interbank foreign exchange market, the local unit opened on a strong note at 80.53, but pared gains and finally settled at 81.26 against the American currency, registering a fall of 48 paise over its last close.
On Friday, the rupee appreciated by 62 paise to close at 80.78 against the dollar.
“Indian Rupee depreciated on recovery in US Dollar and weak domestic markets. However, Rupee opened higher on upbeat macroeconomic data,” said Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas.
India’s industrial production expanded by 3.1 per cent in September, boosted by manufacturing, mining and power sectors, according to official data released on Friday.
“Overall weakness in the Dollar amid rising expectations of the not-so-aggressive Federal Reserve may also support the Rupee at lower levels. Sustained FII inflows may also support Rupee. However, higher crude oil prices may cap sharp upside,” Choudhary added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.59 per cent to 106.91.
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