 "Potential debt payment, outflow sentiment likely to weaken rupee")
With potential debt payments and outflow of foreign currency from the domestic market, the rupee is expected to weaken during the week after the marginal strengthening on Friday.
Reserve Bank of India (RBI), however, is likely to ensure that the rupee does not weaken significantly because of which it could not fall below 64 a dollar last week. "Lots of debt payments are expected to come this week. The broad range will be 63.25 to 64 and the bias will be towards weakening," said Sandeep Gonsalves, forex consultant and dealer, Mecklai & Mecklai.
On Friday, the rupee had closed at 63.52 a dollar, up from the previous 63.66 a dollar.
"In fact, on Friday, RBI's bond auction of Rs 16,000 crore devolved partially on primary dealers due to lack of participation in the auction by insurance companies. "This week, the yield on the 10-year bond could trade in the range of 7.9 to 7.95 per cent. The partial devolvement in Friday's auction was probably because RBI is not comfortable with yields rising significantly. The demand is not sufficient at the current level of yields," said Badrish Kulhalli, the head of fixed income at HDFC Life.
Reserve Bank of India (RBI), however, is likely to ensure that the rupee does not weaken significantly because of which it could not fall below 64 a dollar last week. "Lots of debt payments are expected to come this week. The broad range will be 63.25 to 64 and the bias will be towards weakening," said Sandeep Gonsalves, forex consultant and dealer, Mecklai & Mecklai.
On Friday, the rupee had closed at 63.52 a dollar, up from the previous 63.66 a dollar.
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The government bond yields might trade range-bound and the bias continue to be towards yields rising. This is because the appetite for bonds from the insurers' side has dropped.
"In fact, on Friday, RBI's bond auction of Rs 16,000 crore devolved partially on primary dealers due to lack of participation in the auction by insurance companies. "This week, the yield on the 10-year bond could trade in the range of 7.9 to 7.95 per cent. The partial devolvement in Friday's auction was probably because RBI is not comfortable with yields rising significantly. The demand is not sufficient at the current level of yields," said Badrish Kulhalli, the head of fixed income at HDFC Life.