Based on the evidence at hand, Modi's goal of scripting a broader, lasting upturn appears some way off, says Rajesh Kumar Singh.
The rupee bounced back by 26 paise to end at 59.93 against the American currency on Friday as exporters and some banks sold dollars.
The rupee had revisited the near 2-month low of 60.55 per dollar earlier in the session.
The rupee had closed at 60.1550/1650 per dollar on Monday.
India could allow global online retailers such as Amazon.com Inc to sell their own products as early as next month, removing restrictions that could boost competition in one of the world's biggest, and most price-sensitive, retail markets.
Increased selling of the dollar by banks and exporters amid sustained foreign capital inflows supported the rupee.
The bank adds it expects Modi to fight inflation through administrative measure
A higher opening in the domestic equity market also supported the rupee but dollar's gain against other currencies overseas limited the rise of domestic unit, forex dealers said.
The rupee had retreated four paise from its 11-month high levels to close at 58.63 against the dollar on Tuesday on fresh demand for the US currency from importers, amid some profit- booking in stocks.
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A Reuters poll had forecast retail inflation would edge up to 8.48 per cent from 8.31 per cent in March.
Analysts polled by Reuters had forecast a contraction of 1.5 per cent in output.
He said the total capital requirement for state-run banks is Rs 455 billion ($7.6 billion) in 2014/15 fiscal year, much lower than the Rs 113 billion provided for recapitalisation in the interim budget in February.
The currency got support from dollar flows into local equities and greenback sales from state-run lenders.
Forex dealers said besides selling of the American currency by exporters and banks, gains in other Asian currencies against the dollar and a higher opening in the domestic stock market also supported the rupee.
In the latest large opinion poll, the opposition Bharatiya Janata Party and its allies were forecast to win a narrow majority in the 543-seat lower house of parliament, compared with previous surveys predicting that they would fall short.
The domestic currency had gained a massive 47 paise to close at 60.60 on Friday amid heavy selling of the US currency by corporates, exporters and banks.
Analysts polled by Reuters had forecast an annual growth of 0.9 per cent in output.
The finance minister chided the central bank on Tuesday over its focus on fighting inflation, saying the Reserve Bank of India (RBI) also needed to abide by the government policy to promote economic growth.
India said on Tuesday it was investigating US policies supporting solar panel makers, the latest move in an escalating row over renewable energy that has worsened already strained ties between the two countries.
Industrial countries cannot at this point wash their hands off developing economises and say we will do what we need to, and you do the adjustment you need to, says RBI Governor.
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