The rupee started the new year on a flat note and depreciated 3 paise to 83.19 against the US dollar in the morning session, amid a negative trend in domestic equities and dollar demand from importers.
Forex traders said the rupee is trading in a narrow range as the support from easing crude oil prices was negated by the strength of the American currency in the overseas market.
At the interbank foreign exchange, the rupee opened at 83.18 against the dollar, then fell to 83.19, registering a fall of 3 paise over its previous close.
In the initial trade, the rupee also touched an early high of 83.15 against the US dollar.
On Friday, the rupee appreciated 4 paise to settle at 83.16 against the US dollar on the last trading day of 2023.
At the start of the new year, the dollar index was stable at 101.38, and Brent oil was at USD 77.07 per barrel. Asian currencies are also very stable with Yuan at 7.1253, IDR at 15,390, KRW at 1,294.53, said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.
"Rupee is likely to remain stable within a range of 83.10 to 83.35 as US dollar buying at lower-end matches the in-flows and keeps the rupee stable within a range. As the FX reserves touch the USD 620 billion mark, RBI's presence on both sides of the market keeps the rupee stable," Bhansali added.
The forex reserves continued to rise for the third consecutive week, adding USD 4.471 billion more in the week ending December 22, taking the total to USD 620.441 billion, according to the weekly data released by the Reserve Bank on Friday.
In the previous reporting week, the kitty had swollen by USD 9.112 billion to USD 615.971 billion, making the quantum of increase one of the highest in a week. In the week before, the overall reserves had risen by USD 2.816 billion to USD 606.859 billion.
Meanwhile, Brent crude futures, the global oil benchmark, was trading lower by 0.14 per cent to USD 77.04 per barrel.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.10 per cent higher at 101.33.
In the domestic equity market, the 30-share BSE Sensex was trading 74.33 points or 0.10 per cent lower at 72,165.93 points. The broader NSE Nifty fell 4.85 points or 0.02 per cent to 21,726.55 points.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Friday as they purchased shares worth Rs 1,459.12 crore, according to exchange data.