The rupee is expected to strengthen this week as currency dealers see dollar inflows from foreign investors due to a rise in domestic stocks.
While government bond yields might rise, as there are expectations that the Reserve Bank of India might increase the repo rate in the second quarter monetary policy review due to high inflation.
Currency dealers see the rupee trading in the range of 60.80 and 61.90 this week and the bias is towards strengthening.
The strengthening would be despite month-end dollar demand from importers.
“Inflows from foreign institutional investors will be there to support the rupee,” said a current dealer with a public sector bank.
On Friday, the rupee ended at 61.27, compared with the previous close of 61.22 a dollar.
The rupee had opened at 61.19 and during intra-day trades, it touched a high of 60.93, a level last seen on August 8.
The rupee had ended at 60.86 to a dollar on August 8. The intra-day low for the rupee was 61.71