Custodian banks were heard to be suppliers of the Greenback. As a result, the local unit has not depreciated inspite of the sell-off in the domestic equity markets.
Within the time constraint that they were in, Finance Minister Arun Jaitley has done a reasonably sound job of articulating his intent. Now the focus shall shift towards implementation of the plan and also on planning outside Budget.
Over this week, Indian rupee has also witnessed sharp swings, but primarily on global concerns and on post event hangover, viz. elections and Union Budget, Nifty has corrected from 7808 towards 7470 now. High beta stocks like mid-caps and small caps have suffered the most. Sectors like infra, autos, metals and banks have led the fall.
Over the next week, Indian rupee is expected to hover within a broad range of 59.5 and 60.5 and Nifty to trade between a range of 7350 7600.
By Anindya Banerjee, currency analyst, Kotak Securities