The Indian rupee closed weaker on Monday as the US Dollar Index remained strong and amid the geopolitical tensions in the Middle East.
The local currency weakened 3 paise to close at Rs 83.45 against the US dollar. It had closed at Rs 83.42 a dollar on Friday, according to Bloomberg data.
Amid global turmoil, the rupee displayed resilience and traded in a narrow range between 83.42 and 83.46, defying expectations of volatility, according to Jateen Trivedi, research analyst at LKP Securities.
The US dollar held steady near 105.70 and crude-oil weakness offset gains as "market sentiment was weighed down by geopolitical tensions from the Iran–Israel conflict", Trivedi said.
"Geopolitical events take centre stage creating a risk-off sentiment. The Euro dives on a combination of a dovish ECB and a hawkish Fed. Hotter US inflation continues to support elevated US bond yields," Kunal Sodhani, vice president of Shinhan Bank, said.
India's robust fundamentals and record-high forex reserves serve as a buffer, enabling the RBI to mitigate downward pressure on the rupee, according to Amit Pabari, managing director at CR Forex Advisors.
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