Dollar/Rupee may open down today - IIFL

Dollar/rupee may open down Tuesday following the series of measures unveiled by the Reserve Bank of India to curb foreign exchange volatility and strengthen the local currency.

Dollar/rupee may open at Rs 59.55-60/$1 Tuesday compared to previous close Rs 59.90/$1.

Since the RBI has hiked the Bank rate and MSF and plans to conduct Open Market Operations, we expect the local currency to strengthen

The RBI late Monday hiked the Marginal Standing Facility and Bank Rate to 10.25%, curbed banks' borrowing from Liquidity Adjustment facility at 1% of net demand and time liabilities and also announced plans to sell bonds to suck out liquidity to make the local currency attractive.

Meanwhile retail sales in US expanded 0.4%, less than the 0.8% forecast compared to 0.6% a month earlier, which could also provide some respite to the rupee.

Source : Equity Bulls

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