Mumbai, April 7 The rupee depreciated by 16 paise to close at 93.06 against the US dollar on Tuesday, as investors remained cautious ahead of US President Donald Trump's deadline for opening the Strait of Hormuz and the Reserve Bank's monetary policy review.
Forex traders said the USD/INR pair was trading under pressure, due to sustained withdrawal of foreign capital, a strong dollar, and higher crude oil prices amid a volatile geopolitical situation.
Moreover, market participants will remain watchful of evolving geopolitical developments and the upcoming RBI monetary policy decision.
At the interbank foreign exchange market, the rupee opened at 93.05 against the US dollar and touched an intra-day low of 93.12. During the day, the rupee also touched an intra-day high of 92.86 against the greenback.
At the end of Tuesday's trading session, the rupee was quoted at 93.06, down 16 paise from its previous close.
On Monday, the rupee gained 28 paise to close at 92.90 against the US dollar, following the Reserve Bank's measures to curb speculative activity and dampen volatility in the Indian currency.
The RBI has tightened its rules to curb speculative positions and capped banks' net open positions at USD 100 million.
Meanwhile, the Reserve Bank's rate-setting panel on Monday began its three-day brainstorming session on the first bi-monthly monetary policy of the fiscal year. The decision of the six-member Monetary Policy Committee (MPC), headed by Reserve Bank Governor Sanjay Malhotra, will be announced on Wednesday.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was down 0.15 per cent at 99.83.
Brent crude, the global oil benchmark, was trading lower by 1.97 per cent at USD 107.61 per barrel in futures trade.
On the domestic equity market front, the Sensex jumped 509.73 points to settle at 74,616.58, while the Nifty climbed 155.40 points to 23,123.65.
Foreign Institutional Investors offloaded equities worth Rs 8,692.11 crore on Tuesday, according to exchange data.
Meanwhile, US President Donald Trump's deadline for opening the Strait of Hormuz expires today, with Iran still not relenting on the ceasefire proposal.
According to Dilip Parmar, Senior Research Analyst, HDFC Securities, the market is now in a "wait-and-watch" mode ahead of the RBI policy announcement and President Trump's Tuesday night deal deadline.
"Technically, USD-INR spot maintains a range with immediate support at 92.50 and resistance pegged at 93.60," Parmar said.