Rupee settles 12 paise lower at 73.93 against US dollar

The rupee slipped for the second straight day to end 12 paise lower at 73.93 (provisional) against the US dollar on Thursday as investors remained cautious ahead of the RBI policy meet outcome.

Analysts said investor focus is on the Reserve Bank of India's Monetary Policy Committee's three-day interest rate-setting meeting that started on Wednesday, with the decision due on Friday.

At the interbank forex market, the domestic unit witnessed a highly volatile trading session. It opened at 73.81 and saw an intra-day high of 73.68 and a low of 73.95.

It finally closed at 73.93 a dollar, registering a decline of 12 paise.

"Indian rupee depreciated despite weakness in dollar and rise in risk appetite in the global markets as investors remained cautious ahead of the RBI monetary policy meeting outcome," said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas.

Mukadam further added that "market sentiments improved on promising reports on efficacy of COVID-19 vaccine and on hopes for more fiscal stimulus from the US government. Additionally, the UK granted emergency use authorization for COVID-19 vaccine developed by Pfizer Inc and BioNTech."

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.12 per cent to 91.00.

On the domestic equity market front, the BSE Sensex ended 14.61 points or 0.03 per cent higher at 44,632.65, while the broader NSE Nifty rose 20.15 points or 0.15 per cent to 13,133.90.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 357.35 crore on a net basis on Wednesday, according to provisional exchange data.

Brent crude futures, the global oil benchmark, fell 0.33 per cent to USD 48.09 per barrel.