Ahead of US Fed policy decision, rupee closes at 82.78 against dollar

The rupee depreciated 19 paise to close at 82.78 (provisional) against the US dollar on Wednesday, tracking a muted trend in domestic equities ahead of the release of the US Fed's policy statement.

At the interbank foreign exchange market, the local unit opened at 82.64 and witnessed a high of 82.62 and a low of 82.81.

It finally settled at 82.78 against the American currency, registering a fall of 19 paise over its last close of 82.59.

"Rupee consolidated in a narrow range ahead of the important events that are lined up today and tomorrow," said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.

The focus will be on the Federal Open Market Committee (FOMC) policy statement on Wednesday, which is likely to trigger volatility for the greenback.

The RBI's rate-setting panel will be meeting on Thursday to discuss and formulate a response to the government for a failure to meet the inflation target.

Its reply will focus on the reasons that led to inflation staying above 6 per cent for nine consecutive months when it sees inflation coming back into the 2-6 per cent band and the measures that will be taken, Governor Shaktikanta Das said.

The Pound and Euro too are consolidating in a range ahead of the Bank of England (BoE) policy statement. The BoE is also expected to raise rates and maintain a hawkish stance.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.28 per cent to 111.17.

Global oil benchmark Brent crude futures slipped 0.26 per cent to USD 94.40 per barrel.

On the domestic equity market front, the 30-share BSE Sensex fell 215.26 points or 0.35 per cent to end at 60,906.09, while the broader NSE Nifty advanced 62.55 points or 0.34 per cent to 18,082.85.

Foreign Institutional Investors (FIIs) were net buyers in capital markets as they purchased shares worth Rs 2,609.94 crore on Tuesday, according to exchange data.