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Concerns over the new Omicron Covid-19 variant, as well as continued foreign fund outflows will keep Indian rupee subdued during the upcoming week, experts have opined.

Besides, high YoY trade deficit along with new US tapering measures will hamper any appreciation move.

However, the downside will be capped by lower oil prices along with probable RBI interventions.

"On the positive side, falling crude oil prices around $73 per barrel levels and accommodative monetory policy should provide some respite," said Sajal Gupta, Head, Forex and Rates at Edelweiss Securities.

"Historically, some intervention shall be looked upon for any trend reversal in rupee."

The RBI is known to enter the markets via intermediaries to either sell or buy US dollars to keep the rupee in a stable orbit.

"We expect the pair to trade between 75.50 to 76.50 next week with a lower bias for the pair."

Last week, the rupee closed at 76.09 to a USD weakening significantly on a weekly basis.

The Indian rupee has stabilised in the last two sesions this week after hitting lowest level of 20 months.

"Rupee lost ground against dollar precipitiusly in early part of the week amid risk averse sentiments, policy divergence, foreign fund outflows and higher trade deficit numbers. The RBI's policy divergence with Fed weighed on local currency along with higher imports," said Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities.

"Trading volumes are set to decline as forex markets head into the Christmas break. Spot USDINR expected to consolidate between 76.50 to 75.70 before heading higher towards 77."

So far, the foreign institutions have sold over $4 billion worth of equities in this qurter.

Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services, said: "Next week, on the domestic front no major economic data are expected to be released but FIIs who have been on the sell side if take a pause on the selling could restrict sharp depreciation of the rupee.

"From the US, except core PCE index no other data is expected to release but now that the Federal Reserve has started to increase its bond tapering program market participants could continue to be positive on the greenback. We expect the USDINR (Spot) to quote in the range of 75.70 and 76.50."