All Eyes On The Local Currency

The rupee will be watched closely not just this week but for some time to come.

Last week, the Reserve Bank of India hinted through its moves that genuine investors are welcome but not the ones interested only in arbitraging the rate differential in India and other countries.

This spawns the question of whether the flow of foreign exchange, which has provided a comfort level both in the forex as well as money markets, will continue.

The unanimous view is that while inflows will continue, the momentum will decelerate for now. Participants say the inflows will increase once the calendar year is over as institutional investors will make fresh allocations.

 

Thus, while the long-term outlook for rupee is firm, in the short term, the currency is likely to be choppy, moving in a wide range of 45.70-46.10 per dollar.

The dollar