US interest rate normalisation policy is likely to keep global FX markets volatile.
The rupee plunged 20 paise to close at an all-time low of 78.13 against the US dollar on Monday, as a lacklustre trend in domestic equities and stronger greenback overseas weighed on investor sentiments. Forex traders said weak Asian currencies and persistent foreign capital outflows were the other major factors that dragged the local unit down. At the interbank foreign exchange market, the local currency opened at 78.20 and witnessed an intra-day high of 78.02 and a low of 78.29 against the US dollar.
India Ratings principal economist Sunil Kumar Sinha said the Brexit is a mixed bag for the country.
The RBI fixed the reference rate for the dollar at 65.2525 and for the euro at 72.1954.
Many analysts over the past week have said the RBI has legroom to cut rates to the tune of 65 bps by June and some like Barclays and BofA have also spoken about the likelihood of an inter-meeting cut.
The government is likely to name a successor to Rajan sometime this month
RBI will review the monetary policy again on September 29.
Ahead of the Budget, Finance Minister Arun Jaitley on Tuesday underlined the need for tax reforms and quick decision making to ensure stability in policy regime.
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