INSUBCONTINENT EXCLUSIVE:
benign oil prices have strengthened the Indian currency but what has worked best for the rupee is the fading impact of war hysteria
Experts now see a chance for the RBI to recoup the reserves it spent in 2018 defending the rupee.Putting a number to this, Gurang Somaiya,
currency analyst at Motilal Oswal, said: "It is possible that RBI may limit some of the appreciation and recoup some of its lost reserves
but it may only come if the rupee strengthens to around Rs 68.20 a dollar.""The rupee appreciated and closed at 70.14 for the last week on
the back of strong flows and fading impact of war hysteria," said Sajal Gupta, head forex and rates, Edelweiss Securities.In addition, Mr
Gupta said that some "big flows are lined up next week
Maybe Arcelor Mittal money can hit the Indian markets which can lead to some more appreciation towards 69.50 unless the RBI
intervenes".However, the rising dollar index is causing nervousness and any breakout may lead to a reversal in the rupee's trend, said Mr
Mr Somaiya said that RBI may choose not to intervene as the central bank's prime aim was to arrest volatility."Yes the rupee is inching
below the 70-a-dollar mark but then the (general) election can cause massive volatility
Also, it is seen that a lot of central banks are getting into a dovish stance owing to the fears of global slowdown."The RBI had to stop the
crude touched $86-a-barrel mark in early October but started to ease following the US decision to exempt 8 countries, including India and
for India, directly affects the exchange rates.A major factor supporting the rupee is the strong prospect of better fund flows from
abroad."Inflows into India have clearly turned positive since the end of January
The flows in February is the highest since November 2017
The trigger for this inflows is the dovish statement that came from the Fed at the end of January," said VK Vijayakumar, chief investment
strategist at Geojit Financial Services.Foreign exchange reserves stood at $401.78 billion as against $393.13 billion in November last year
