Mumbai, March 21 Sustained foreign inflows along with a slew of upcoming IPOs is expected to strengthen the Indian rupee during the week ahead.
Accordingly, these factors are expected to push the rupee beyond its current 52 week high mark.
This might lead RBI to absorb dollars to keep the rupee in check.
"Rupee hasn't shown any signs of weakness. Large inflows on the back of numerous bunched up IPOs in March have helped the local currency. Rupee has now emerged as the best performing currency in the last 1 month. Rising yields and inflation remain the key risk for the currencies," Sajal Gupta, Head, Forex and Rates at Edelweiss Securities told .
"Next week's range is expected from 72.40 to 72.80."
Last week, the rupee closed flat at 72.57 to a USD.
"Huge line up of IPOs, robust FPI inflows on account of rejig in international index weights, international debt fund raising by corporate is supporting the rupee," said Devarsh Vakil - Deputy Head of Retail Research at HDFC Securities.
"We expect the rupee to strengthen and attempt to surpass 52 week highs of 72.26 this week. At that point of time, RBI will intervene and absorb dollars near 72 levels and will stop it from appreciating further. On the downside, 73.6 will remain a strong barrier for a few weeks."
India's central bank is known to enter the markets via intermediaries to either sell or buy US dollars to keep the rupee in a stable orbit.
"There are still speculations over an early US Fed rate hike, which are keeping the dollar bulls active. At the same time, coronavirus spreading rapidly has given rise to fears of regional or partial lockdowns and this will put upside pressure towards 72.95," said Rahul Gupta, Head Of Research-Currency, Emkay Global Financial Services.
"However, the increase in the covid vaccination drive may keep the risk appetite intact."
According to Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services: "US 10-year yield has been on the rise and will continue to be in focus as further gains could strengthen the dollar. For the week, the USDINR
( With inputs from IANS )
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