Rupee - Feb 5, 2021 - Reliance Securities

Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities

The Indian Rupee ended with small gain on Friday but was little changed against the U.S. currency this week, as persistent dollar bids by the Reserve Bank of India, offset the impact of foreign equity inflows.

The Rupee ended at 72.92 compared with 72.95 on Thursday.

Foreign investors, in four sessions this month till yesterday, have bought about $1.8 billion of Indian equities compared to more than $1 billion of outflows recorded last week.

Meanwhile, the Reserve Bank of India (RBI) Governor Shaktikanta Das said the Monetary Policy Committee (MPC) has decided to keep policy rates unchanged.

The Governor added that FY22 GDP growth is pegged at 10.5%. Further, growth is projected in the range of 26.2% to 8.3% in 1H and 6% in Q3 in FY22.

The statement also added that CPI inflation estimate has been revised to 5.2% for Q4FY21 and 5.0-5.2% for H1 FY22 vs 4.6-5.2% earlier.

Meanwhile, Asian currencies were broadly weaker this week tracking gains in the U.S. Dollar Index.

The Dollar Index was weak this Friday ahead of the payroll number tonight but was headed for its best weekly gain in three months lifted by growing confidence that the U.S. economic recovery will outpace its global peers.

On the stimulus front, the U.S. Senate took a procedural step that would allow the Democratic Party to pass President Joe Biden's stimulus package with votes from Republican Party lawmakers.

The one-year forward premium was at 3.65 rupees against 3.62 rupees in the previous session.

Technically, the USDINR Spot pair has bounced back from 72.80 levels and was unable to cross above 73.00 levels indicating a sideways momentum to continue within range of 72.75-73.00 levels.

Source : Equity Bulls

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