MUM BAI: Overseas corporate fund flows are expected to buoy the Indian rupee, offsetting pressure from elevated crude prices for the next few weeks as dollar inflows from ArcelorMittal, Vodafone, Shriram Transport Finance to shore up their Indian operations, are likely to flood in.An estimated $7-8 billion are likely to hit onshore in the next few weeks from those corporates, three currency dealers, who are not authorised to comment on the same, said.While elevated oil prices continue put pressure on the rupee, expected dollar inflows arising out of corporate events should shield the local unit from free falling, said Bhaskar Panda, senior vice president treasury advisory group, HDFC Bank.Given the current circumstances, the rupee is expected to be range bound until election results in May.
Traders are not taking any aggressive new bets.Global crude prices have surged nearly 6% in past one month amid tightening global supplies.The rupee was one of the four worst-performing currencies among emerging markets this April, with elevated global crude prices threatening to impair New Delhis fiscal math.
India, one of the largest crude consumers in the world, will have to borrow more to narrow the gap between overseas spending and revenues with its overseas shipment bills going up.Between April 2 and 18, the rupee lost 0.88% against the greenback, data from Bloomberg showed.Timing is a bit uncertain, not necessarily due to elections, said RK Gurumurthy, head - treasury at LVB.
The spoilers are crude prices and a possible correction in equity prices and a pull-out by foreign investors.Despite this, the shortterm bias is for a slightly stronger rupee with corporate money flows hitting onshore, he said.