The rupee fell on Monday to begin the week on the back foot as the dollar rose broadly, driven by souring investor sentiment worldwide on a surge in cases in China pushed for tighter regulations there, dashing hopes for an early easing of restrictions.
According to Bloomberg, the rupee was last changing hands at 81.8475 per dollar after opening at 81.8288, compared to its previous close of 81.6875 on Friday.
PTI reported that the rupee fell 11 paise to close at 81.85 against the US dollar provisionally.
China is dealing with Covid flare-ups. Beijing's most populated district requested that people spend Monday at home after learning of two fatalities on Sunday. The latest cases have dashed hopes that the government will soon loosen its tight regulations.
That helped the dollar, which is valued as a safe haven during times of economic uncertainty around the world.
"After opening weak at 81.79, the rupee hit a low of 81.91 before regaining to 81.74. It, however, remained weak and closed at 81.84 as the dollar index moved higher," said Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors.
The dollar index, which compares the value of the greenback against a basket of its major peers, is down more than 6 per cent from its October 20-year high on bets the US Federal Reserve will ease its aggressive interest rate hikes policy because of a decrease in inflation there last month.
Still, on Monday, the index was up about 12 per cent for the year as bond yields have increased in 2022 due to the Fed's aggressive interest rate hikes, drawing capital back to fixed-income investments denominated in dollars.