Rupee likely to start flat, with vulnerability lingering post-90 breakout

The Indian rupee is likely to open flat to slightly weaker on Monday, with traders anticipating a mild depreciation bias following its move past the 90-per-dollar level last week.

In the NDF market, the Indian rupee is trading at 89.96-90.02, after closing at 89.98 on Friday.

Traders expect pressure on the rupee to persist unless trade negotiations show progress or portfolio inflows improve. Foreign investors have sold a net $1.3 billion in Indian equities so far in December, pushing year-to-date outflows to $17.7 billion.

India’s equity benchmarks are expected to open higher on Monday, building on the previous session’s gains after the central bank cut interest rates and infused additional liquidity into the banking system.

The Gift Nifty futures were trading at 26,321.5 points, suggesting that the benchmark Nifty 50 is set to open above Friday’s close of 26,186.45.