| The spot rupee is expected to appreciate this week. However, the rally may be checked by dollar buying by public sector banks at the behest of the Reserve Bank of India.
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| While the lower-than-expected GDP growth in the US, which has already led to a dip in the dollar, will act as a positive trigger for the rupee, the rally may be further enhanced by FII inflows.
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| The proposals in the Budget will also act as triggers for FII inflows.
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| The other major cue for foreign investment will be the outcome of the Bihar elections and its impact on the stability of the government, if any.
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| However, RBI intervention may check the rise in rupee as it is perceived that the central bank cannot risk an overvalued rupee-dollar exchange rate.
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| The spot rupee, therefore, is expected to rule in the range of 43.60-43.80 during the week.
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| Forwards seen up
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| Premiums on forward dollars are slated to go up this week, feel dealers. They said as the system is surplus with dollars contrary to the assumption of the cash dollar shortage, banks will try to book it, both as part of the interbank positions and on behalf of corporates.
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| With an appreciating in the rupee, importers are likely to come forward for booking their obligations. Exporters will also rush for realising their proceeds in order to lose out on account of the rupee appreciation. |
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