Mumbai: The rupee was strong in afternoon trade on Monday on the back of dollar inflows, even as domestic shares remained choppy, traders said.
At 2:30pm, the partially convertible rupee was at Rs 45.4750/4800 per dollar, after rising to Rs 45.5350 in early deals. It had ended at Rs 45.5950/6050 per dollar on Friday.
Dealers expect the rupee to trade in a narrow band of 45.45-45.65 per dollar during the day.
Foreign institutional investors bought Indian shares worth $145.04 million on Thursday, after being net sellers in the previous five sessions. They have pulled out $1.35 billion this year until 3 February, on concerns over high inflation.
Shares climbed 0.4% on Monday, but trading was choppy with investors watching foreign funds for direction. Export-led outsourcers led the gainers.
The euro recovered a tad on Monday on Asian buying after lunar new year holidays, though it remained on shaky ground after a jump in U.S. Treasury yields undermined its yield advantage.
The dollar index, a measure of the greenback’s performance against six major currencies, was down 0.01% to 78.032 points, but well off a three-month low of 76.881 plumbed on Wednesday.
One-month offshore non-deliverable forward contracts were quoted at Rs 45.75, weaker than the onshore spot rate.
In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and the MCX-SX and the United Stock Exchange were all at 45.6550, with the total traded volume at $2.9 billion.