The RBI’s weekend measures to curb speculation and contain volatility in the forex market seems to be sustaining, with the Rupee opening 60 paise stronger on Tuesday.
The Indian currency opened at 95.17 per US Dollar against the previous close of 95.77. Currently, it is trading at 95.27.
On Monday, the Rupee appreciated about 1 per cent. It opened 97 paise stronger at 95.76 per USD against the previous close of 96.73. However, it closed almost flat level at 95.77.
“Monday’s sharp appreciation suggests that the RBI’s measures (including tighter rules on certain foreign exchange derivative positions and direct dollar supplies to state-owned oil companies)have given the rupee meaningful near-term support. If dollar demand in the spot market remains contained, USD/INR could extend its decline.
“The repeated rejection of 96.70–96.90 level (after approaching it in May, July and October), suggests that the dollar is facing a significant ceiling. With the RBI’s measures supporting the rupee, we expect USD/INR to move towards 95.00–94.80 in the near term,” said Amit Pabari, MD, CR Forex Advisors.