The one-month rupee non-deliverable forwards (NDF) in the offshore markets on Monday cooled by 75 paisa to Rs 69.97 — the lowest in the past two weeks — as investor sentiment improved after favourable exit polls numbers for the BJP-led National Democratic Alliance (NDA). In the local markets, the rupee on Monday closed at Rs 69.74 against the dollar, an appreciation of 48 paisa or 0.69%.
Experts believe the rupee may be volatile but might not appreciate much from current levels. “The movement in the spot and in the NDF market is primarily on account of the exit poll numbers and we will have to wait for the final results,” said MV Srinivasan, VP, Mecklai Financial.
“However, the spot levels will not move much as we believe the Reserve Bank of India will intervene,” Srinivasan added. According to provisional data by the Bombay Stock Exchange (BSE), foreign portfolio investors (FPIs) bought stocks worth nearly $250 million on Monday on the back of outflows amounting to $1.2 billion in the previous eight trading sessions. However, global problems such as the US-China trade war and rising crude oil prices could keep the rupee from appreciating too much, said dealers.
The most traded bond– 7.17% yielding paper maturing in 2028– fell by 7 basis points (bps) to close at 7.41% on Monday– the lowest in the past five-weeks. Yields have been settling down as foreign investors bought bonds worth $520 million from Indian bond markets in the past week ended May 17.