Mumbai: The rupee opened on a flat note against the US dollar in early trade on Tuesday, weighed down by a muted trend in domestic equities and the strength of the American currency in overseas markets.
At the interbank foreign exchange market, the local unit moved in a narrow range. It opened at 83.49 against the American currency and touched 83.50 in initial trade.
On Monday, the rupee settled for the day lower by 10 paise at 83.50 against the US dollar.
The Reserve Bank of India’s positive economic outlook, with solid growth and unchanged inflation projections, suggests that there is less room for any early cuts amid prospects of rising inflation. This is likely to benefit the rupee from a favourable interest rate differential, said CR Forex Advisors MD Amit Pabari.
Further, Foreign Institutional Investors (FII) have resumed their buying. FIIs were net buyers in the capital markets on Monday, as they purchased shares worth Rs 2,572.38 crore, according to exchange data.