After touching a five-month high on Friday,the rupee is likely to touch a high of 52.25 to the US dollar this week as foreign fund inflows are likely to continue,experts said.
“The rupee is likely to trade in the range of 52.25-52.80 this week as foreign capital inflows are likely to continue. Also,some of the measures taken by the government to reduce fiscal deficit will also support the currency,” IDBI Bank Treasury Head NS Venkatesh said.
Pointing to the measures taken by the government over the past fortnight to reduce fiscal deficit,he said the diesel price hike and monitoring of all expenditure above Rs 200 crore by the finance minister will also support the currency.
“The government also hopes that money garnered through disinvestment and spectrum auctions will help bridge the fiscal deficit,which is seen as a positive for the currency,” Venkatesh said.
Domestic currency,which had plummeted to 57.15 to the dollar in June,has sharply bounced back to close at Rs 52.85 last Friday on the back of reform measures announced by the government.
The rupee had plunged over 25 percent between August 2011 and this June,the worst performing BRIC currency.
Besides the measures taken by the government,the stimulus announced by the US Fed along with European Central Bank also supported the rupee as it led to higher foreign capital inflows.
Referring to the rupee movement,currency strategist at Geojit Comtrade Hemal Doshi said that rupee would be range bound in the near-term.
“Though the rupee had touched 5-month high level last Friday,the fiscal deficit numbers for the April-August period,which has reached 66 per cent of the budgeted target,is a matter of concern for the rupee,” he said.
He also said the movement of the domestic currency will also depend on the euro-dollar movement in the coming weeks.