Rupee to appreciate, yields to trade range-bound

The rupee is expected to appreciate this week, amid dollar flows into the domestic market. And government bond yields are seen range-bound ahead of the Reserve Bank of India (RBI)'s monetary policy on April 1. The Street expects the key policy rates to remain unchanged in the policy review.

"The rupee may trade in the range of 60.50 to 61.50 per dollar this week. The bias is towards appreciation of the rupee," said a currency dealer with a state-run bank.

The currency rose the most in two weeks on Friday on strong foreign flows into domestic markets. The rupee ended at 60.93 to a dollar, compared to the previous close of 61.33. It had opened at 61.20.

According to currency dealers, there is month-end dollar demand from importers, but foreign flows in domestic market is helping the rupee appreciate.

The yield on the 10-year benchmark government bond 8.83 per cent 2023 ended at 8.80 per cent on Friday, compared to the previous close of 8.82 per cent.

According to Siddharth Shah, vice-president at STCI Primary Dealer, this week the yield might trade in a range of 8.70 to 8.85 per cent.

There is a lack of buying interest in bonds, ahead of the financial year closing.