Influx of foreign funds to keep rupee on steady trajectory

Healthy influx of foreign funds in domestic equities and debt markets is expected to keep the Indian rupee on a steady trajectory during the upcoming week.

"RBI (Reserve Bank of India) may continue to intervene in the spot and futures market to prevent appreciation in the rupee against US Dollar. At the same time, inflows in debt and equity markets may continue to push the US Dollar downward," Anindya Banerjee, Associate Vice President for Currency Derivatives with Kotak Securities, told IANS.

"The result of this fight can be a period of reduce volatility and base formation in USD/INR. Indian Rupee is expected to trade firm against British Pound and Euro. However, against Yen, Rupee may remain under pressure."

The Indian rupee is predicted to range between 66.50-67.20 in the very near-term.

Inspite of healthy inflow of funds, the rupee depreciated last week. It weakened by 11 paise to 66.89 against a US dollar from its previous close of 66.78 to a greenback on August 6.

Lately, the influx of foreign funds has aided the equity and currency markets to recover from lower levels.

For last week, provisional figures from the stock exchanges showed a hefty influx of foreign funds worth Rs 3,524.96 crore.

Figures from the National Securities Depository (NSDL) showed that FPIs (Foreign Portfolio Investors) were net buyers of equities worth Rs 2,466.14 crore, or $368.53 million, from August 8-12.

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, the pace of FIIs (Foreign Institutional Investors) fund inflow into the Indian equity markets will be another key factor for the indices movements.

--IANS

rv/vm