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The rupee opened on a flat note against the US dollar in early trade on Tuesday, weighed down by the strength of the American currency in the overseas market and elevated crude oil prices.
Forex traders said the rupee remains under pressure due to ongoing elections as well as foreign fund outflows and the same shall subside once the results are out.
At the interbank foreign exchange market, the local unit moved in a narrow range. It opened at 83.51 against the American currency, unchanged from its previous close.
On Monday, the rupee consolidated in a narrow range and settled flat at 83.51 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was at 105.26, higher by 0.04 per cent.
Brent crude futures, the global oil benchmark, rose 0.13 per cent to $83.47 per barrel.
"Overall, despite short-term pressures on the rupee, major global factors such as the Israel-Iran conflict and oil prices are stabilising. Consequently, with the Lok Sabha elections passing and internal factors aligning, the rupee is poised to strengthen based on its strong fundamentals," CR Forex Advisors, MD Amit Pabari said.
On the macroeconomic front, India's retail inflation eased to an 11-month low of 4.83 per cent in April, as prices of some kitchen items declined though the overall food basket firmed up marginally, according to government data released on Monday.
The Consumer Price Index (CPI)-based retail inflation was 4.85 per cent in March. It was 4.7 per cent in April, 2023.
"India's inflation eases mildly, however, the food remains elevated with inflation in some items like vegetables, pulses, etc. remaining in double-digit, thereby giving lesser leeway to RBI for a prospective rate reduction anytime soon," Pabari said.
On the domestic equity market, the 30-share BSE Sensex was trading 31.16 points, or 0.04 per cent higher at 72,807.29 points. The broader NSE Nifty was up 14.15 points or 0.06 per cent, to 22,118.20 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday, as they offloaded shares worth ₹4,498.92 crore, according to exchange data.
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