The domestic unit on Thursday gained 20 paise to close at a seven-month high of 69.34 against the US dollar Thursday, extending gains for a fourth session in a row, on robust foreign inflows ahead of general elections.
The currency in the four sessions to Thursday has appreciated by 80 paise or 0.8 per cent on hopes of forex inflows.
Gaurang Somaiya, Research Analyst (Currency) at Motilal Oswal Financial Services, says the rupee is expected to weaken after RBI announced that it would enter into currency swap for a three-year tenor, to supply funds to banks for a longer duration.
The RBI plans to conduct the dollar-rupee buy-sell swap auctions on March 26th, it said, adding that the dollar amount mobilised through this auction would also reflect in RBI’s foreign exchange reserves for the tenor. The step is to curb the volatility and major appreciation of the currency.
Today, USD/INR pair is expected to trade in the range of 69.70- 68.10, Somaiya added.