The rupee ended Tuesday’s trading session almost unchanged, appreciating by just 1 paisa to settle at 84.85 (provisional) against the US dollar, narrowly above its record low of 84.86. Forex markets responded cautiously to the appointment of Sanjay Malhotra as the 26th Governor of the Reserve Bank of India (RBI), with expectations of a potential monetary policy shift, including a rate cut in February.

During intraday trade, the rupee opened at 84.80, touching a low of 84.86 before closing flat. On Monday, the rupee had recorded its steepest fall in over a month, closing at its all-time low of 84.86.

Analysts attributed the rupee’s subdued performance to a strong US dollar, weak domestic markets, and rising crude oil prices. "We expect the rupee to trade with a negative bias due to a stronger dollar and crude oil gains. However, foreign institutional inflows and possible RBI intervention could provide some support," said Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan. He predicted the USD-INR spot price to trade within the range of 84.65 to 85.10, with investor focus on upcoming US inflation data.

The dollar index, which measures the greenback’s performance against six major currencies, rose by 0.13% to 106.28. Meanwhile, Brent crude oil futures slipped 0.36%, trading at USD 71.88 per barrel.

On the equity market front, the Sensex closed almost flat at 81,510.05, gaining just 1.59 points, while the Nifty declined marginally by 8.95 points to 24,610.05. Foreign Institutional Investors (FIIs) remained net buyers on Monday, purchasing shares worth Rs 724.27 crore, according to exchange data.

Outgoing RBI Governor Shaktikanta Das, credited for managing India’s monetary policy during the pandemic and overseeing key initiatives like demonetization and GST rollout, officially demits office on Tuesday.