Rupee opened lower by 44 paise at 72.88 per US dollar on Monday. On Friday, rupee posted its biggest single-day gain in a period of more than five years, rising by 100 paise to end the day at 72.44 against the US dollar, according to Blooomberg index. The 10-year government bond yield stood at 7.78 percent from its previous close of 7.781 percent. “Today USDINR likely to remain in the range of 72.17 (stretched 71.91) to 72.95 (stretched 73.47). Rupee has witnessed quite a turnaround last week as Crude remains weaker. This week will be a curtailed one for Indian domestic markets with 7th & 8th Nov being bank holidays,” Hiren Sharma Portia Advisory Services LLP.
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Meanwhile, as global crude oil price remain high, the rupee is expected to remain under pressure and may hit the 76 levels in comparison to the US dollar in the coming three months, says a global report. The rupee has already surpassed the 74 mark in wake of continued strengthening of the dollar, weak foreign flows and higher crude oil prices. Since the start of the calendar year, the unit has lost more than 15 percent.
“Assuming global crude prices stay elevated (slightly above USD80/a barrel), we retain our bearish view on the rupee and see it plumbing to 76 over the next three months,” says a weekend report by the Swiss brokerage UBS.
The central bank has been RBI has been making intervention in the foreign exchange market to counter volatility from April to the first week of August 2018. It resulted in a substantial fall in the forex reserves that fell by $25 billion to $393 billion last week.