Rupee likely to remain volatile ahead of RBI monetary policy meet outcome, USDINR may trade in this range | The Financial Express

Rupee likely to remain volatile ahead of RBI monetary policy meet outcome, USDINR may trade in this range

The Indian rupee is likely to remain volatile amid strong dollar, risk aversion in markets, and cautious sentiments ahead of the RBI Monetary Policy Committee meeting outcome.

Rupee likely to remain volatile ahead of RBI monetary policy meet outcome, USDINR may trade in this range
Today, focus today will be on the RBI policy statement. The expectation is that the central bank could continue to raise rates by another 50bps and maintain a hawkish stance.

The Indian rupee is likely to remain volatile amid strong dollar, risk aversion in markets, and cautious sentiments ahead of the RBI Monetary Policy Committee meeting outcome. In the previous session, rupee closed slightly higher against the US dollar after a choppy session in which the Reserve Bank of India likely sold dollars to support the local currency. The rupee ended at 81.86 per dollar, a tad higher than the record closing low of 81.94 in the previous session. While the domestic currency opened higher at 81.61, it was not able to sustain the gains amid dollar buying by foreign banks and oil companies. However, the rupee managed to avoid falling below the 82 mark.

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Dilip Parmar, Research Analyst, HDFC Securities

“The Indian Rupee is expected to open higher following an overnight pullback in the dollar index while major G-10 currencies gained against the greenback. The forward markets indicate spot USDINR could open around 81.65 and consolidate in the narrow range before the RBI Policy decision.”

“Spot USDINR is having resistance at 82.40 and support at 81.50 and 81.10. The pair could retrace in the near term as momentum oscillators turn weak on the daily and hourly chart. Asian stocks dropped on Friday in the wake of another plunge on Wall Street as the prospect of higher interest rates and turmoil in Europe stoked fears of a global recession.”

Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors

“The dollar index has fallen to 112.98 and the US 10-year yield is at 3.79% while oil is slightly down at $ 87.31 per barrel on the prospect of an output cut, weaker dollar, and a recession. The US markets were down overnight by 458 points while Nasdaq fell by 314 points on US Final GDP figures for June-22 printing at -0.6% taking the US technically into a recession. Asian markets were trading lower with SGX nifty down by 26 points. The Chinese Manufacturing activity grew unexpectedly in the month of September-22. US jobless claims also fell to a five-month low.”

“RBI will announce its policy rate decision at 10.00 AM today with the market factoring in a 50 bps rate hike and expecting a 75 bps surprise from RBI looking to all other countries. The language of RBI MPC will be important. The rupee is to open at 81.59 levels and is expected to be in a range of 81.30 to 82.00 and remain volatile amidst the announcement of the RBI monetary policy. RBI protected 81.92 levels yesterday by selling dollars from its coffers. Exporters may await a trigger of 81.50 stop loss or sell near to 82.00 levels. Importers are to buy the dips on the pair to hedge their payables, preferably near to 81.45 levels.”

Also Read: RBI Monetary Policy LIVE: MPC likely to hike repo rate by 50 bps; may cut growth forecast

Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services

“Rupee continue to trade in a narrow range against the dollar as market participants were cautious ahead of the U.S. GDP data which was scheduled later in the day. US growth numbers were reported in line with expectations at -0.6%, although it was higher than the previous quarter’s data of -1.6%. On the domestic front, India’s current account deficit number was released and data showed the deficit widened to 2.8% of GDP at USD 23.9 billion in the first quarter of the current financial year. Today, mainly on account of a higher trade deficit, focus today will be on the RBI policy statement. The expectation is that the central bank could continue to raise rates by another 50bps and maintain a hawkish stance.”

“What the central bank stance is going ahead on rates, growth and inflation will provide cues to the rupee. Marginal profit booking was seen at higher levels after China’s offshore yuan rose by about 1% to 7.0894 per dollar after some reports suggested that state banks have been told to stock up for yuan intervention. The pound rebounded by more than 1.5% yesterday after the BoE said it would step in to calm the turbulence in the UK government bond market. The BoE bought  $1.55 billion of British government bonds with maturities of more than 20 years, the second day of a multi-billion pound program designed to stabilize the market. We expect the USDINR(Spot) to trade sideways and quote in the range of 81.50 and 82.20.”

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