In lackluster trade, the Indian rupee on Monday closed almost flat at 61.73 against the Greenback on alternate bouts of demand and supply amid rise in dollar value overseas.
While the marginal drop in rupee was its third straight session of decline, the local currency seemed to hold steady compared to Asian peers, who saw volatility after data showed Japan slipping into recession, said forex experts.
At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced strong at 61.63 a dollar from previous close of 61.72, but later declined to a low of 61.7875 before settling at 61.73, showing a fall of a mere one paise or 0.02%.
The dollar was trading strong in overseas market as the dollar index was up by 0.13% against its major six global rivals.
The benchmark S&P Sensex on Monday improved further by over 131 points, or 0.47% to end at new peak while FIIs bought shares worth $109.58 million last Friday.
Good capital inflows in Indian equities cushioned the rupee fall, a forex dealer said.
Pramit Brahmbhatt, Veracity Group CEO said,"Rupee is expected to appreciate in coming days tracking gains in local equities. The trading range for the spot rupee is expected to be within 61.20 to 62.00."
In the forward market, premia closed lower on fresh receipts from exporters.
The benchmark six-month premium payable in April declined further to 213-215 paise from 215-217 paise last weekend.
Forward contracts maturing in October, 2015 also dropped to 437.5-439.5 paise from 443-445 paise.
The Reserve Bank of India fixed the reference rate for dollar at 61.6780 and for the Euro at 77.3565.
The rupee continued to rule firm against the pound to end at 96.56 from last close of 96.65, but dropped further to 77.14 per euro from 76.82.
It also rose to 53.08 per 100 Japanese yen from last close of 53.01.