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Rupee to gain strength on likely return of FIIs
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SME Times News Bureau | 08 Nov, 2021
The expected return of foreign capital into India's key indices will
strengthen the Indian rupee further during the upcoming week.
Accordingly, the rupee is likely to touch the 74 to a USD mark during this period.
The
FIIs have been on a selling spree in India's equity market, however,
the rate of off-load has significantly come down during the last few
sessions.
On last Thursday, during the hour-long 'Muhurat Trade
Session', FIIs sold just Rs 328.11 crore worth of stocks on the BSE, NSE
and MSEI in the capital market segment.
"Rupee closed strong in
this short trade week at 74.50 to a USD on back of lower crude and IPO
inflows. Also on the back of IMF's suggestion of lower interventions to
India's Central bank," said Sajal Gupta, Head, Forex and Rates at
Edelweiss Securities.
"The US yields also softened a bit after
touching 1.70 levels paving way for a rally in risk assets. Rupee is
expected to test 74 levels this week and the Nifty is likely to gain
further strength."
According to Devarsh Vakil, Deputy Head of
Retail Research, HDFC Securities: "This week rupee behaved exactly as
expected and appreciated amid heavy FPI flows from ongoing IPOs. Better
PMI numbers of manufacturing and service activities indicating economic
conditions are improving."
"We now expect the Rupee to
consolidate its recent gains and also factor in the important
announcement of tapering from the US FOMC this week. We continue to
remain rupee bulls, and we expect it to appreciate towards the 73.5-mark
over the course of the next few weeks."
On the other hand,
Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial
Services said: "Domestic factors continue to be in favour of the rupee
as a number of IPOs are attracting fund flows and thereby supporting the
currency. Inflation and industrial production too will be in focus on
the domestic front."
"Rise in inflation is likely to trigger
volatility for the currency as well as 10-year yields. We expect the
momentum for the rupee would continue to remain positive and it could
quote in the range of 74.20 and 75.20."
In addition, the currency
desk of Emkay Global Financial Services: "This week was a short week
with USDINR spot witnessing a downtrend on IPO subscriptions."
"But
we can brace for a heightened volatility next week after the FOMC, BOE
monetary policy decisions, OPEC meeting and US NFP data."
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
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87.50
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84.65 |
Euro
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78.25
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75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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