Rupee likely to remain range-bound this week
After appreciating over 110 paise on Friday due to stimulus measure announced by US government coupled with diesel price hike, the rupee is likely to trade between 54.30-54.80 to the dollar this week, say experts.business Updated: Sep 16, 2012 09:57 IST
After appreciating over 110 paise on Friday due to stimulus measure announced by US government coupled with diesel price hike, the rupee is likely to trade between 54.30-54.80 to the dollar this week, say experts.
The domestic currency jumped 113 paise to close at a two-and-half month high of 54.30 on back of capital inflows worth Rs 2,800 crore and heavy dollar selling by exporters and some banks, after the third round quantitative easing measures (QE3) announced by the US central bank on Thursday.
"The rupee movement on Friday was due to announcement of the QE3 by the Fed, which saw dollar sales by foreign banks along with some capital inflows. However, the market will now actually wait to see the kind of inflows coming in the coming days before any significant upward movement," IDBI Bank treasury head NS Venkatesh said.
The rupee is likely to trade in the 54.30-54.80 range this week before any significant appreciation, he said.
On the policy measures taken up in government economy, Venkatesh said they would definitely help boost the sentiment.
Last Friday, the Centre allowed 51% FDI in retail and foreign airlines to hold 49% stake in domestic carriers.
It also gave green signal for disinvestment in four public sector enterprises and allowed FDI in power exchanges and non-news related broadcast services.
A day earlier, it had also raised diesel price by a hefty 12% and put restrictions on the number of subsidised LPG cylinders used for domestic use.
India Forex Advisors chief executive Abhishek Goenka said the rupee may see 53.50-54 level to the dollar in the future on the back of Fed announcement of stimulus measures.
"We could see rupee appreciating to 53.50-54 levels as the risk appetite has again taken the command over the global market," he said.
However, concerns over domestic economy remains and reduction in deficit would be crucial for rupee, he said.
Another rupee-watcher said the currency movement will also be dependent on what the RBI does on Monday when it will unveil its mid-quarter review of the monetary policy.