Rupee settles marginally down at 74.28 against US dollar

The rupee pared its initial gains to settle marginally lower at 74.28 (provisional) against the US dollar on Tuesday amid continued meltdown in equity markets and sustained foreign fund outflows.

Forex traders said the Indian rupee which started the day on a positive note, witnessed heavy volatility amid fears that the rate cut by the Reserve Bank would not be sufficient to boost market sentiments.

At the interbank foreign exchange market, the local currency opened at 74.16. During the day it saw a high of 73.86 and a low of 74.32 against the American currency.

The domestic unit finally settled at 74.28 against the greenback, down 2 paise over its previous closing price.

The local unit had settled at 74.25 against the greenback on Monday.

"Rupee witnesses further weakening after continued meltdown in the equity markets and sustained foreign fund outflows," Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.

Somaiyaa further noted that "markets seemed disappointed from the RBI meet on Monday which failed to discuss any interest rate decision although it put brief light on the swap operations it announced in the recent past. USDINR is likely to trade in the range of 74.20 and 74.70".