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The rupee started the new year on a flat note in the first trading session on Monday due to rising crude oil prices and sustained foreign fund outflows.
Forex traders said the domestic unit traded in a narrow range as firming crude prices and foreign fund outflows negated support from strong domestic equities and a weak US currency.
At the interbank foreign exchange, the rupee opened weak at 82.66, registering a fall of 5 paise from its previous closing price.
The local unit also touched an early high of 82.57 against the greenback in early deals.
The rupee had closed at 82.61 on the last trading day of 2022.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.30% to 103.52.
Global oil benchmark Brent crude futures rose 2.94% to $85.91 a barrel.
The rupee started flat on Monday morning amid lack of cues from overseas markets. However, tracking the overall gain in crude last week could limit the upside, said Sriram Iyer, Senior Research Analyst at Reliance Securities.
On the domestic macroeconomic front, India’s fiscal deficit rose to 59% of the full-year budget estimate at the end of November on increased capital expenditure and slower growth in non-tax revenue.
Meanwhile, India’s foreign exchange reserves declined by $691 million to $562.808 billion as of December 23, declining for the second consecutive week, according to RBI data.
Collections from Goods and Services Tax (GST) increased by 15% to over ₹1.49 lakh crore in December 2022.
On the domestic equity market front, the 30-share Sensex was trading 210.53 points or 0.35% higher at 61,051.27, while the broader NSE Nifty advanced 57.15 points or 0.32% to 18,162.45.
Foreign institutional investors remained net sellers in the capital market on Friday as they sold shares worth ₹2,950.89 crore, according to stock exchange data.