The rupee bounced back after hitting a record-breaking low in the previous session, and finished at 77.32 against the dollar on Tuesday, 10 May.
However, the Indian currency was still weaker than its opening earlier in the day, which was marked at 77.27.
"Rupee consolidated in a narrow range after falling to fresh all-time lows yesterday. Broader strength in the dollar against its major crosses kept the rupee weighed down," NDTV quoted Forex & Bullion Analyst Gaurang Somaiya as saying.
On Monday, the rupee closed at the new all-time low of 77.50, weighed down by elevated crude oil prices and a widening trade deficit. Earlier in the day, the Indian rupee had fallen past the 77 per dollar mark for the first time in early trade.
Forex traders have also that risk appetite has weakened amidst escalating concerns over inflation and may trigger more rate hikes by the global central banks.
The dollar index, which measures the value of the US dollar against a basket of six foreign currencies, was trading 0.35% higher at 104.02, tracking rising United States yields and fears about higher interest rates, PTI was reported as saying on Monday.
Meanwhile, India's foreign exchange reserves have plunged by around $45 billion from its all-time high of $642 billion in September 2021.
As per the data released by the Reserve Bank of India (RBI) last week, the country’s forex reserves fell to $598 billion for the week ended 29 April, reported Business Standard.
(With inputs from Business Standard, NDTV and Bloomberg.)
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