Rupee falls 5 paise to 88.77 against US dollar in early trade

Mumbai: The rupee traded in a narrow range and fell 5 paise to 88.77 against the US dollar in early trade on Monday, tracking the broad strength of the American currency amid a risk-off tone globally.

Forex traders said the rupee is hovering near its all-time closing low level as the RBI is monitoring the depreciation of the USDINR pair towards 88.80.

At the interbank foreign exchange market, the rupee opened at 88.75, the fell to 88.77 against the greenback, registering a fall of 5 paise from its previous close.

On Friday, the rupee had settled at 88.72 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.04 per cent to 98.93.

Brent crude, the global oil benchmark, rose 1.50 per cent to USD 63.67 per barrel in futures trading.

"The market sentiment for the pair is influenced by the US dollar's strength amid a modest risk-off tone globally and domestic factors, including RBI's stable policy stance and controlled inflation outlook," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.

The dollar index was slightly down following a softer US-China trade war, Bhansali said, adding that the global market volatility and geopolitical developments remain the key drivers in the near term.

On the domestic equity market front, Sensex dropped 451.82 points to 82,049 in early trade, while the Nifty declined 109.55 points to 25,175.80.

Meanwhile, Foreign Institutional Investors bought equities worth Rs 459.20 crore on Friday, according to exchange data.

India's forex reserves fell by USD 276 million to USD 699.96 billion during the week ended October 3, according to RBI data.

In the previous reporting week, India's forex reserves had dropped by USD 2.334 billion to USD 700.236 billion.