MUMBAI: The Indian rupee was nearly unchanged on Tuesday as dollar demand from foreign banks and importers offset positive cues from gains in regional currencies that benefited from a pullback in dollar strength.

The rupee was at 84.4025 against the US dollar as of 10:23 a.m. IST, little changed from its close of 84.3850 in the previous session.

Asian currencies were mostly higher between 0.1% to 0.4% while the dollar index was marginally lower at 106.2.

It declined 0.4% on Monday as likely profit booking weighed on the greenback after its rise to a yearly high last week.

However, the rupee was unable to benefit from a softer dollar as “dollar inflows seem to have dried up,” amid the exodus of foreign money from local stocks and equities, a trader at a mid-sized foreign bank said.

Foreign investors pulling out about $15 billion from local equities over 34 sessions - since the benchmark indexes hit record highs on Sept. 27 - has kept the rupee under pressure.

The foreign holding of Indian government bonds under the Fully Accessible Route (FAR) has also declined to its lowest level since mid-September. Overseas investors have sold these securities worth more than $1 billion on a net basis in the 10 trading sessions in November.

Indian rupee holds ground against dollar

The Indian central bank’s routine interventions though have been a counterweight to the outflows, helping the rupee avoid sharp declines.

The RBI has been “standing at 83.41 and has not allowed any movement beyond this level (on USD/INR),” Anil Bhansali, head of treasury at Finrex Treasury Advisors said.

State-run banks were spotted offering dollars intermittently in early trading on Tuesday as well, a second trader at a foreign bank said.