Outlook : Currency

Rupee is likely to test new highs..

The rupee is likely to touch the 48.50 mark this week, though for most of the time it may range between 48.50 to 48.62 per dollar.

Dealers are anticipating inflows from exporters, non-resident Indians (NRIs) and also from one or two large corporates, apart from some inflows from foreign direct investments and foreign institutional investors (FIIs).

NRIs are seen bringing in greenbacks and putting it in rupee deposits, as has been witnessed in the last couple of months. They are seen depositing money in the rupee accounts for a year as they get better returns compared with investments in dollar accounts overseas.

A major corporate is also seen bringing in its export proceeds this week. These are significant in size but the corporate always plays cautiously by remitting money in tranches so that it does not disturb the equilibrium.

Importers are not seen covering up their positions. They are not taking any forward cover and postponing their purchases till they actually need the dollars.

Dealers feel that corporates are now seeing the rupee at 48.50.

Any negative news such as that of a US attack in Middle East can hurt the rupee. However, the RBI is likely to intervene in both cases