Forex Markets Remain Steady Despite Rao
According to forex experts the $2 billion worth of trading that takes place everyday is not expected to be affected unless there is a large outflow of funds from the country.
The only fear is that if the Sensex moves below the 2800 -mark -- which is a good resistance level -- there will be a large fall which might then affect the rupee level against the dollar. For the present the dollar level is expected to stay around the Rs 35.60/70 levels.
According to Kiran Umrootkar, CEO of Paterson Securities and Forex Brokers Ltd. There is a need to be apprenhensive only if the sensex moves below resistance levels as it might put some pressure on the rupee.
The RBI is however well prepared with a well padded cushion of reserves to meet any contingency or volatility in the market.
The Reserve Bank is presently monitering the market movements very closely.
Bankers stated that even a small increase in volatility will be stemmed by the RBI. A number of FIIs are however reported to be well prepared to move out funds if there are alarming levels of volatility in the dollar-rupee rates.
On the call money side the expected CRR cut has the call rates cooling a bit. That apart, being the second week of the reporting fortnight most banks have covered their requirements, due to which there was not much demand for funds.