Rupee rises 5 paise to 73.28 against US dollar in early trade

MUMBAI: The rupee opened on a flat note and inched 5 paise higher to 73.28 against the US dollar in early trade on Thursday supported by positive domestic equities and weak American currency.

Traders said investors are cautious ahead of the RBI Monetary Policy Committee (MPC) decision on Friday. At the interbank forex market, the rupee was trading in a narrow range.

It opened at 73.29 against the American currency, gained some ground and touched 73.28, up 5 paise from its previous close. On Wednesday, the rupee settled at 73.33 against the US dollar.

"While the natural tendency for the rupee is to strengthen in the backdrop of a weak US dollar globally, nationalised banks likely on behalf of the Reserve Bank buy the dips to around 73.10 aggressively," said Abhishek Goenka, Founder and CEO, IFA Global.

Goenka further added "we are likely to see another quiet, range bound session ahead of the MPC decision on Friday".

The newly-constituted MPC of the Reserve Bank began its three-day deliberations on Wednesday. The decision of the rate-setting panel will be announced on October 9. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.05 per cent to 93.58.

On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 450.46 points higher at 40,329.41, and the broader NSE Nifty rose 124.05 points to 11,862.90. Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 1,093.81 crore on Wednesday, according to exchange data. Brent crude futures, the global oil benchmark, rose 0.24 per cent to USD 42.09 per barrel.