Mumbai: The rupee depreciated 5paise to settle at 83.49 against the US dollar on Thursday due to foreign capital outflows and rising crude oil prices overseas.Forex traders said a weak American currency and firm trend in the equity markets supported the local currency even as investors remained concerned ahead of the RBI’s monetary policy decision to be announced on Friday. At the interbank foreign exchange market, the local unit opened at 83.40 and touched the intra-day low of 83.50 against the greenback during the session. The local unit finally settled at 83.49 against the American currency, down 5paise from its previous close.

On Wednesday, the rupee settled 7paise higher at 83.44 against the dollar. According to Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, the rupee depreciated due to a surge in crude oil prices and selling pressure from FIIs (foreign institutional investors). However, a weak US dollar and positive tone in the domestic markets supported the rupee at lower levels. “We expect the rupee to trade with a slight negative bias on worries over rising crude oil prices, and as FIIs continue to sell in the markets. However, positive tone in the domestic markets as NDA is expected to come back to power for the third consecutive term, raising optimism over policy continuity may support the rupee at lower levels,” Choudhary said, adding that “USD-INR spot price is expected to trade in a range of Rs 83.20 to Rs 83.80”.