The yield on the 10-year bond may fall to 8.70 per cent due to FII flows in debt.
Dollar flows in domestic markets are expected to continue but state-run banks are seen mopping the flows to boost RBI's foreign exchange kitty.
He noted that the Rupee has firmed recently but cautioned that the currency should not lose its competitiveness in global trade.
The view among the regulator and the government is that the currency is overvalued
The big test will come at the end of March when the fiscal year ends and banks tend to hold on to cash.
Analysts expect RBI to restore 100-bp corridor in Tuesday's policy review.
Increased demand from oil importers for the American currency and a weak opening in the domestic stock market also put pressure on the rupee.
RBI is unlikely to stem the slide against the dollar as the greenback is rising rapidly against all currencies in the world.
It is important to approach the belief of people in ancient India's achievements with a sense of proportion, balance and empathy, argues B S Raghavan, the distinguished civil servant.
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