The rupee started the week on a stronger note gaining 16 paise on Monday to close at 62.81 against the dollar driven by a fall in international crude oil prices and with trade deficit in February narrowing to 17-month low.

After touching 63 levels, it had closed sharply weaker at 62.97 on Friday.

Monday, the Indian unit opened flat at 62.96 at the Interbank Foreign Exchange market.

The unit strengthened to 62.76 with the support of lower oil prices and exporters selling dollars. However, a relatively negative domestic equity market limited the rupee at 62.81 at day’s close, a currency dealer said.

The BSE-benchmark Sensex remained volatile with a downward bias and ended at 28,437.71, weaker by 65.69 points (0.23 per cent) as against the previous close on Friday.

Intra-day, the rupee traded in the 22 paise range between 62.76 and 62.98 per dollar.

India's February trade deficit narrowed to a 17-month low to $6.84 billion as falling crude prices helped in reducing the import payment bill, as imports in February fell to $28.39 billion.

Exports falling for the third consecutive month in February to $21.55 billion could weigh on the rupee.

Call rate falls; Bonds flat

The interbank call money rate, rate at which banks lend to each other to overcome overnight liquidity mismatches, ended weaker at 6.65 per cent from previous close of 6.75 per cent. Intra-day, call money market moved in the broad range of 6.50 per cent and 8.10 per cent. 

The 10-year benchmark 8.40 per cent government bond, maturing in 2024, declined a tad to Rs 103.88 from Friday’s close of Rs 103.94. Subsequently, the yield hardened slightly to 7.80 per cent from 7.79 per cent. Bond prices and yields move in opposite directions.

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