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The rupee is likely to move with an appreciation bias this week as dollar demand is seen limited due to the holiday season for the New Year. Government bond yields are seen range bound amid thin trades.
The rupee ended at 61.85 on Friday compared with its previous close of 62.16. The rupee had appreciated on Friday due to dollar flows from corporates. But during intra-day trades it had also breached the 62 to the dollar mark.
"The rupee may again breach the 62 per dollar mark this week. But the weakness is seen limited at the start of the New Year due to thin trades," said a currency dealer with a public sector bank. The currency dealers also added that the Reserve Bank of India (RBI) will ensure that the rupee do not weaken significantly against the dollar.
"If required RBI will again intervene," said the dealer. Foreign exchange reserves fell in the week ending December 20 by $12.6 million to $295.50 billion, showed RBI data released on Friday.
Meanwhile, government bond yields are seen range bound this week. "There is not much trading volume expected due to the holiday season and many traders are away from the market," said a government bond dealer with a public sector bank.
