Mumbai, Dec 8 (PTI) The rupee depreciated 10 paise to close at 90.05 against the US dollar on Monday, as elevated crude oil prices and persistent foreign fund outflows dented investor sentiments.

Forex traders said multiple pressures, such as sustained importer demand for the American currency, foreign fund outflows from equities, and lingering uncertainty over the India-US trade deal, are keeping investor sentiment fragile.

At the interbank foreign exchange market, the rupee opened at 90.07, then gave up ground and fell to an intra-day low of 90.26 against the US dollar, down 31 paise from its previous close.

At the end of the trade on Monday, the rupee settled at 90.05 against the greenback, down 10 paise over its previous close.

On Friday, the rupee settled at 89.95 against the US dollar, after the Reserve Bank of India cut the key policy interest rate for the first time in six months.

According to Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan, the rupee is expected to trade with a negative bias on persistent FII outflows and weak domestic markets.

"However, a weak tone in the US dollar amid expectations of rate cut by the Fed in December may support the rupee at lower levels. Any intervention by the central bank may also support the rupee. USD-INR spot price is expected to trade in a range of Rs 90.05 to Rs 90.75," Choudhary said.

On Friday, Reserve Bank Governor Sanjay Malhotra said the central bank does not target any band for the rupee in the forex market, and allows the domestic currency to find its own correct level.

"We don't target any price levels or any bands. We allow the markets to determine the prices. We believe that markets, especially in the long run, are very efficient. It's a very deep market," he said, while replying to a question on rupee depreciation at a post-monetary policy press meet on Friday.

Forex traders said investors' focus has now shifted to the Fed's policy outcome on December 9-10. Markets are placing nearly a 90 per cent probability on a rate cut next week.

Meanwhile, India and the United States will commence three-day talks on the first phase of their proposed bilateral trade agreement here from December 10.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.01 per cent lower at 98.98.

Brent crude, the global oil benchmark, was trading lower by 0.71 per cent at USD 63.28 per barrel in futures trade.

On the domestic equity market front, Sensex tanked 609.68 points to settle at 85,102.69, while the Nifty dropped 225.90 points to 25,960.55.

Foreign institutional investors sold equities worth Rs 655.59 crore on Monday, according to exchange data. PTI DRR HVA

Rupee falls amid market pressures; RBI says it allows currency to find its level and may intervene. The Reserve Bank does not operate a predefined band and permits the currency to be determined by market forces, while retaining the option of Currency Intervention to support orderly conditions; current downward pressure on the rupee stems from crude oil prices, importer dollar demand, and foreign institutional investor outflows, with potential offset from a weaker US dollar and central bank action.