In IPO season, rupee caught in the middle of global and local pull

Foreign money is pouring into India when the US dollar is gaining strength against emerging markets currencies.

Two opposite forces are at work to keep the Indian rupee trading on a narrow, stable course: a trend that should continue for now, say currency experts.

Foreign money poured in for the initial public offering of Zomato IPO, which marks a pipeline of more big-name IPOs. At the same time, the US dollar is also gaining strength against emerging markets currencies after the Federal Reserve indicated at least two hikes by 2022. A renewed surge of Covid-19 infections is keeping global risk appetite at bay.

The situation is a dilemma for the Reserve Bank of India (RBI). If it