Rupee seen in tight range

The rupee is expected "to be kept" in a tight range this week. Apart from the impact of the overseas dollar movements, the rupee will feel the heat if oil prices continue to test newer highs.

The currency is expected to trade in a range of 43.60-43.70 per dollar. The market has already factored in a 25 basis point cut in the US rates when the US Federal Open Market Committee meets on March 22.

The undercurrent is rupee-bullish on the back of strong foreign institutional investor inflows, further boosted by public offerings.

External commercial borrowings and American depositary shares offerings will also add to dollar inflows. Volumes are likely to be low due to the holiday-shortened week.

Premiums seen subdued

Forward dollar premiums are unlikely to witness any sharp changes this week. Oil prices and changes in the US rates policy will intensify pressures.

A hike in petroproduct prices in India could also push up the dollar premiums.

Recap: The rupee, after opening on a strong note at 43.54/43.55 per dollar, ended last week down at around 43.65/43.66.

A rebound in dollar and rising oil prices put pressure on the local currency.

It had hit an intra-week low of 43.70 on strong demand from state-run banks. Mild corporate demand for dollars towards the end of the week also added to the weakness in the rupee.