Rupee settles almost flat against U.S. dollar

Foreign institutional investors have withdrawn more than $17.5 billion from domestic equities and debt in the past four months.

The rupee recouped early losses and settled almost flat at 76.55 (provisional) against the U.S. dollar on Wednesday on expectations of higher dollar inflows.

However, a lacklustre trend in domestic equities and the strength of the greenback in the overseas market weighed on the local unit, forex traders said.

At the interbank forex market, the domestic unit opened at 76.69 against the U.S. dollar and touched an intra-day high of 76.50. It finally closed at 76.55, registering a rise of just 1 paisa over its previous close of 76.56.

According to HDFC Securities Research Analyst Dilip Parmar, the rupee managed to recoup early morning losses and settled with a slight gain on the expectation of dollar inflows from initial public offerings (IPOs) and corporate dollar selling.

"Most of the Asian currencies were down against the U.S. dollar, while strength in the Chinese Yuan supported the local unit," Mr. Parmar said.

The U.S. Federal Reserve's shift to a more aggressive rate tightening concern is mounting in capital outflows from emerging markets and India as one of them, this has added pressure on the rupee against the U.S. dollar.

Foreign institutional investors have withdrawn more than $17.5 billion from domestic equities and debt in the past four months.