Rupee Ends Flat at 68.21 vs Dollar Ahead of RBI Policy Meet

Mumbai: The rupee on Monday settled almost flat with negative bias at 68.21 against the US currency in a restricted trade amid stray dollar demand from importers.

Overall forex market sentiment remained cautious ahead of the central bank's policy review on Wednesday and a steep crash in euro.

The Euro plunged to 20-month low in Asia following Italian Prime Minister Matteo Renzi's decision to resign in the wake of a referendum defeat, though later it bounced back to retrace most of the losses.

At the Interbank Foreign Exchange (forex) market, the home currency resumed marginally higher 68.18 against last weekend's close of 68.20, but immediately reversed the upbeat momentum to touch a low of 68.27.

However, bouts of dollar selling by exporters and banks led the domestic unit to recover in late afternoon deals to hit a two-week intra-day high of 68.12 before ending at 68.21, a loss of one paisa.

It had gained 14 paise to close at 68.20 -- the highest level in more than a week -- on Friday.

In worldwide trade, the US dollar edged higher against major world currencies on expectations of rate hike by the Federal Reserve this month.

Meanwhile, the RBI today fixed the reference rate for the dollar at 68.1703 and euro at 72.0424.

In cross-currency trades, the rupee retreated sharply against the pound sterling to end at 86.71 from 86.10 and also fell back against the euro to finish at 73.01 as compared to 72.56 last Friday.

But, it rebounded against the Japanese yen to close at 59.73 from 59.88 per 100 yens.

In the forward market, premium for dollar witnessed an easy to steady trend owing to lack of market moving factors.

The benchmark six-month premium for May was a tad up at 128.5-130.5 paise from 128-130 paise and the far-forward November 2017 contract was quoted at 272.5-274 paise from 272-274 paise last weekend.

Domestic stock markets rebounded on value buying amid hopes of rate cut by RBI in its policy review due on Wednesday. The BSE Sensex recovered 118.44 points to end at 26,349.10, while broader Nifty rose 41.95 pts to 8,128.75.

Crude prices rallied to multi-month high on hardening expectations that the recent output cut measures by the OPEC will help reduce a global supply glut and shore up prices. The global benchmark brent rose above USD 55 a barrel.